City breathes easier with further state cuts off table in 2009

Minnesota Gov. Tim Pawlenty will not unallot December local government aid payments, he said in a letter sent Tuesday afternoon to city and county leaders. He said his administration intends to work with the Legislature “to formulate budget cuts that can be promptly enacted when the Legislature convenes in February.”

On Monday, the Governor’s office said he was pondering further unallotments to 2009 Local Government Aid (LGA) payments. With the city of Grand Marais set to adopt its budget on Wednesday, that would have made the task a challenge.

Now in a letter addressed to Rochester Mayor Ardell Brede, president of the League of Minnesota Cities, and Ramsey County Commissioner Jim McDonough, president of the Association of Minnesota Counties, the governor said unallotment is for the moment off the table.

He said if working with the Legislature results in no meaningful alternatives, reductions to local aid programs would be considered. “However, the local aid payments scheduled for payment later this month — including local government aid, county program aid, market value credit and other local aid programs — will not be subject to further unallotment as part of this solution.”

Mayor Sue Hakes said $76,500 in LGA due the city remains to be paid. “Initially it was my hope that we could either reduce taxes or at least not raise them,’ she said, “but our LGA has been cut $31,000 so far.”

The city has already made some difficult budget decisions related to previous cuts. However, there is $46,700 remaining in a capital projects budget and councilors have to figure out what to do with it. Under ordinary circumstances the council would use it to reduce next year’s levy or spend it on priority projects identified earlier in the year. However, given the possibility of more unallotments coming from the state in 2010, the council may choose to put the money aside as a contingency.

The city has until the 28th to adopt a budget, but they plan to make that decision Wednesday after taking public input at a 6 p.m. hearing at City Hall.