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14 2883 16:88:19 Via Fax -> <br /> <br />?G34417425 fl&ninistrator <br /> <br />Page 881 Of 804 <br /> <br />Could the governor's proposal <br />become law? <br /> <br /> -FridayFax- <br />A weekly legislative update from the League of Minnesota Citi~ <br /> <br /> ~: ~ ~,. <br /> <br /> advocate at the capitol to identify an alternative <br /> recipient of a larger budget cm--one group rejoices <br /> while another cries foul. <br /> <br />The legislative process to develop and adopt a state <br />budget usually involves give and take between the <br />governor and legislature, the House and the Senate, <br />Demoera£s and Republicans and hundreds of other <br />interests. Although the governor has a tremendous <br />impact off the process due to the constitutional <br />requirement that he propose a complete biennial <br />state budget, in the end, a compromise is always <br />reached which reflects, to a degree, the concerns <br />and needs of all interested parties. <br /> <br />Could Ibis year be different? We have heard <br />rumblings around the capitol that the House and <br />even the Senate might decide to adopt the <br />governor:s proposal and go home. Why would <br />legislators roll over and accept the governor's plan <br />lock, stock and barrel? <br /> <br />With a $4.2 billion state budget deficit and state tax <br />increases apparently off-the-table, there is just no <br />way to easily pare this amount from the budget and <br />not make one group or another unhappy. Yesterday <br />morning, one long-time Republican legislator <br />mentioned in a private conversation, "This just isn't <br />any fun when you don't have any resources." Some <br />legislators might want to enact the governor's plan <br />in hopes of having him be the focal point for all of <br />the criticism. <br /> <br />There might be another rationale behind this <br />strategy. Some legislators have privately indicated <br />that they are amazed at the lack of public reaction lo <br />the governor's plan and that perhaps the legislature <br />should give the public what it wants--lower taxes <br />and less government--with the hope that as the <br />impacts are borne out, individual citizens will then <br />comprehend the government services that benefit <br />them and give clearer signals of their preferences <br />for government services. <br /> <br />This year more than ever, the budget process is a <br />zero-sum game. Modifying the governor's budget <br />proposal without new resources forces every <br /> <br />On the other hand, if legislators do not work to <br />smooth lhe rough edges of the governor's plan, they <br />certainly could be criticized for abdicating their <br />responsibility in the legislative process. Few <br />legislators will want to go home facing irate <br />constituents without the defense of an attempt to <br />moderate.the governor's plan. <br /> <br />Clearly the governor's plan places a heavy burden <br />of budget cuts on cities and the additional burden of <br />extremely tight levy limits on future property taxes. <br />Could it get better? Maybe. Could it get worse? <br />Without a doubt. <br /> <br />The aid reductions in the governor's plan and the <br />tight levy limits proposed by the governor and the <br />Senate property tax freeze are very real proposals. <br />Contact your legislator now and let them know how <br />severely the local government levy limits and aid <br />cuts will impact your community. <br /> <br />Not only an aid cut but a delay? <br /> <br />As mentioned in this week's Cities Bulletin, the tax <br />sections of the governor's budget proposal include a <br />provision that would authorize the Commissioner of <br />Finance to delay the payment of up to 15 percent of <br />any appropriation to a city or a county for up to 60 <br />days after the start of its next fiscal year. For <br />example, up to 15 percent of the July, October or <br />December 2003 LGA or market value homestead <br />credit payments could be delayed until March 1 of <br />2004. <br /> <br />As we mentioned in the Bulletin article, this power <br />would most likely be used in order to help the state <br />lo meet its cash flow needs. This morning, we <br />discussed this provision with Finance <br />Commissioner Dan McElroy and although he could <br />not definitively state whether he would need to <br />exercise the delay power, he did state that the <br />state's cash flow situation is "razor thin." Clearly, <br /> <br />For more informalion on oily legislative issues, conlacl any member of Ihe League of Minnesola C/lies Inlergovernmenlal Relalions learn. <br /> <br /> 651.281.1200 or 800.925.1122 <br /> <br /> <br />