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<br /> <br />. <br /> <br />3490 Lexington Avenue North <br />St. Paul, MN 55126 <br />(612) 490-5600 <br /> <br />IN FORfv1ij,r. ION. <br />IfU,. <br /> <br />League of Minnesota Cities <br /> <br />. <br /> <br />. <br /> <br />Governor's Budget Breaks the Trust <br /> <br />. The Governor's proposal means service cuts, layoffs and property tax <br />increases. Saving $600 million through a salary freeze is not realistic <br />because the proposal does not include a suspension of PELRA. pay equity. <br />or any of the other tools government managers would need to actually freeze <br />salaries. These may not be good ideas. Nevertheless, until the Governor's <br />proposal includes those components, it is nothing more than another proposal <br />for cuts in services, layoffs, and property tax increases. It is unfair to the <br />public to pretend that this money can be saved without serious cuts in <br />services and costs to taxpayers. <br /> <br />. <br /> <br />The Governor's proposal would destroy the Local Government Trust <br />Fund (LGTF). He has proposed taking nearly $52 million from the LGTF <br />to pay for other state spending. In fact he has proposed that any money left <br />in the trust fund should automatically be transferred to the state's general <br />fund. Under this proposal the LGTF as a separate trust fund dedicated to <br />property tax relief has no meaning. <br /> <br />. The cuts in LGA and HACA for 1993 once a2ain break the trust with <br />cities. The Governor has proposed cutting this year's LGA by $10 million <br />from the amounts certified to cities. 1993 HACA to cities and counties would <br />be cut by an additional $9 million. This proposal comes only a month after <br />cities set their levies and budgets based on LGA amounts promised by the <br />state. State revenues are expected to grow by over $1.3 billion. Why must <br />cities take a cut? <br /> <br />. <br /> <br />The fundin~ for LGA for 1994 is inadequate. LGA should grow along <br />with revenues into the LGTF. Growth in LGA is essential to prevent property <br />taxes from escalating faster than they have already. Although we are pleased <br />that the Governor has not proposed eliminating LGA, we are disappointed <br />that he has frozen it at 1992 levels. With state revenues increasing, it is <br />unfair to property taxpayers that city revenues should be frozen, causing <br />property taxes to increase. <br /> <br />February 2, 1993 <br />