INFORMATION #1 04-19-2010 - Laserfiche WebLink

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o~ j,EAGUE of [ytINNESOTA CITIES Apri18, 2010 RECEtV ED APR o 91010 Dear Mayors and Chief Appointed Officials: ~~a CONNECTING & INNOVATING SINCE 1913 Last week Governor Pawlenty signed into law the first supplemental budget bill, Chapter 215 (HF 1671).. This week's Cities Bulletin includes an expanded description of this new law. Among other provisions, it will further reduce Market Value Homestead Credit (MVHC) and Local Government Aid (LGA) payments by $52.5 million in 2010. This is on top of the $128 million in cuts to those two programs that cities have already taken into account in their adopted 2010 budgets. While these latest cuts are not welcome news, we know the reductions could have been far worse. You may recall that the. Governor initially recommended $125 million in cuts to MVHC and LGA in his supplemental budget proposal while the House Tax Chair introduced a bill that would have cut cities by $115 million. By comparison, the cuts as they currently stand are much less than they might have been. Clearly, our collective efforts to explain the impacts of such deep cuts helped to change minds. If you have not already done so, a "thank you" to those legislators who supported this compromise would be appropriate. However, the signing of Chapter 215 does not. eliminate the possibility of additional cuts for cities in 2010. The Legislature and Governor have yet to agree on the second supplemental budget bill which will affect the education and health and human services budgets. Likewise, Chapter 215 was based on the expectation that the state will receive an additional $400 million in Medicaid assistance from. the federal. government. If the Governor and Legislature cannot agree on the remaining. cuts necessary to balance the budget and/or if the federal Medicaid assistance is not forthcoming, the Legislature will have to revisit its earlier actions and possibly' increase budget cuts already included in Chapter 215. Even cities that no longer receive MVHC and LGA could be affected if the. Legislature considers cuts to other aid and credit programs such as PERApenson aid or police and fire aid, programs that all cities currently receive. That, in fact, has already happened this session; $10.5 million was diverted from the Fire Safety Account, a dedicated source of training dollars for fire departments statewide, as part of Chapter 215. I am, therefore, taking this unusual step of writing to ask that you convey to your legislators the importance of not further reducing city programs - in any form -during the final weeks of the session. Including the cuts authorized in Chapter 215, cities have lost over $300 million in aids since the end of 200$.. And, as it currently stands, the state faces a $5.8 billion. deficit in the next biennium beginning July 1, ZOi 1 meaning the likelihood of even more cuts to these aid programs 145 UNIVERSITY AVE. WEST rxorrE: (651) 281-1200 FAX: (651) 281-1299 ST. PAUL, MN 55103-2044 rots FREE: (800} 925-1122 WEB: WWW.LMC.ORG