City Council authorizes legal action regarding State’s Local Government Aid payments

The Minneapolis City Council voted unanimously on June 27 to authorize legal action to require the State of Minnesota to make Local Government Aid (LGA) payments in the event of a State government shutdown. This authorization is a result of discussions with the League of Minnesota Cities, the Coalition of Greater Minnesota Cities and other cities, large and small, across Minnesota who rely on Local Government Aid to sustain essential public services like police and fire. Mayor R.T. Rybak will sign the authorization Tuesday, June 28.

The City Council met in closed session prior to taking the 12-0 vote. The resolution specifically directs the City Attorney to initiate or join in a legal action for the purpose of obtaining timely payments of Local Government Aid and other appropriated funds in the event of a state shutdown on July 1, 2011. The amount appropriated for the City of Minneapolis is $87.5 million, with half due on July 26, 2011 and the other half due Dec. 30, 2011.

In taking this action, the City Council emphasized the importance of the partnership between local governments and the State of Minnesota. Minneapolis, like local governments across the state generates dollars for the State government. The State of Minnesota will collect more than $456 million in sales and commercial-industrial property-tax revenues in Minneapolis in 2011. The State of Minnesota sent $64.4 million in Local Government Aid to Minneapolis in 2010 (including pass-through dollars to the Park Board and Municipal Building Commission).

Unlike other spending programs, Local Government Aid is already appropriated under existing state law. That means additional legislative action is not needed to make the LGA payment to the City of Minneapolis and other LGA cities, even in the event of a State government shutdown.

Published Jun. 27, 2011