When Senate Majority Leader Larry Pogemiller (DFL-Minneapolis) appeared before the press on Monday to react to Gov. Tim Pawlenty‘s supplemental budget, one key point of emphasis was his vow to reduce the size of Pawlenty’s proposed $250 million cut in aid to local units of government. On Thursday, Sen. Tom Bakk (DFL-Cook), whose Taxes Committee will be taking up the matter of local government aid, told PIM he’s aiming for a package that limits those cuts to roughly $100 million.
“I’ve been given a preliminary target of $102 million in cuts,” says Bakk, who is also one of numerous DFL legislators running for governor. Besides reducing the level of aid cuts, he adds, he’ll parse the cuts differently.
“Not all cities get LGA [local government aid],” Bakk notes. “As a result, some cities are impacted much more than others by cuts to that specific program.”
Bakk suggested that he’s likelier to look at solutions involving other local aid mechanisms–chief among them the market-value homestead credit, a program used by the state to buy down local property tax levels. The market-value credit maxes out at $304 on a $76,000 property; it’s lower for properties of greater or lesser value, falling to zero on properties worth $414,000 or more.
“Most communities receive benefit from the market-value credit,” Bakk says, “and fewer get LGA. The right tax policy, I think, is to distribute the burden [of aid cuts] as equally as possible across the state.”
Bakk says it remains to be seen where the Senate DFL will find the additional dollars to pay for a reduction in the size of LGA cuts. But another senior DFL senator, speaking on background, said part of the solution will likely involve deeper across-the-board cuts than those proposed by Pawlenty. “Every chair has been asked to cut a little more than the governor,” the senator says.
Revenue bills could be part of the equation as well. But a senior DFL Senate staffer says the success of any tax hike proposal depends on Republicans, particularly in the House, where the DFL caucus is three votes short of a veto-proof majority: “We’ve said all along that we think we need revenue to solve this problem. But the chances don’t look particularly good. The only way to get there, frankly, is to show everyone what $1.2 billion in cuts really looks like, and see if there are enough Republicans who say, ‘Enough; even I won’t go there.'”
House leadership has been less outspoken about redressing Pawlenty’s local aid cuts, but House Speaker Margaret Anderson Kelliher (DFL-Minneapolis), who is also seeking her party’s endorsement for governor, reportedly told the Coalition of Greater Minnesota Cities earlier this week that $250 million in cuts was simply too large a figure.
House Taxes Committee chair Ann Lenczewski refuses to elaborate on any possible target for local aid cuts in her chamber, but did have this to say to PIM on Thursday: “We all know the Senate is more liberal than the House. I’m guessing our [local aid cuts] package will be between the governor’s and the Senate’s in size.”