Local Government Aid
Local Government Aid (LGA) is a State of Minnesota program that was originally created in 1971 as a means of reducing the disparities in the quality of education, county services and city services between jurisdictions with higher taxable values and lower taxable values. LGA goes directly into the City’s General Fund, which primarily pays for essential services like Police, Fire, 911 and Public Works, as well as many of the City’s other core functions.
It is important to note that Minneapolis is a net contributor of revenue to the State of Minnesota — that is, the City sends more money in sales, income and property taxes to the State than it gets back in return. When it comes to LGA, Minneapolis has been the State’s largest recipient because it is the State’s largest city and provides services to a far-greater daytime population than the number of residents who call the city home.
After years or receiving less LGA than certified, in 2012 the State certified and appropriated $64.1 million in LGA for Minneapolis. The State has once again appropriated $64.1 million in LGA for Minneapolis in 2013. Of this $64.1 million, the City will use $56.4 million in its General Fund, allocate $7.6 million to the Park Board, and $0.2 million to the Municipal Building Commission (MBC). The following table shows the historical certified and actual LGA amounts, as well as projected LGA levels for 2014 based on current law:
*2014 amount is a projected number.
Last updated Nov. 15, 2012