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, and Public Works, as well as many of the City’s other core functions.
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. However, 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.
Following several years of uncertainty in funding from the State of Minnesota in the form of LGA, including the loss of over $70 million from 2008-2011, the State has increased the amount of LGA appropriated to the City of Minneapolis from $64.1 million in 2013 to $76.1 million in 2014. Of this $76.1 million, the City will use $66.9 million for its General Fund; allocate $9.0 million to the Park Board, and the remaining $0.2 million to the Municipal Building Commission (MBC). The table to the right shows the historical certified and actual LGA amounts including the reductions, as well as projected LGA levels for 2015 based on current law:
*2015 amount is a projected number.
Last updated Nov. 13, 2013