Latest news with #LocalGovernmentAid
Yahoo
5 days ago
- Business
- Yahoo
City Council begins 2026 budget process
Jun. 3—During its work session Monday night, the Austin City Council took the first steps toward its 2026 budget with Director of Administrative Services Tom Dankert laying out the timeline for the process as well as a request for direction from the council on where best to focus their efforts. While nothing definitive is decided in these very early steps, Dankert did lay out a trio of questions for council to consider, which include staffing levels, fund balance usage and the 2026 tax levy. Pertaining to the first question, the city is looking at an estimated increase in employee investment of a little over $1.185 million and includes wages and benefits, though Dankert in his presentation pointed out that the estimate does not include changes due to Compensation and Classification re-evaluations. He also pointed out that all eight of the city's bargaining unit contracts will expire on Dec. 31. Point two is asking council members to keep in mind its staffing as it pertains to General Fund expenditures. 2024 expenditures accounted for 49% or just over $10.4 million, which falls just outside of the city's internal police of 42-48% of expenditures, but the Minnesota Office of State Auditor advises cities to stay within the 35-50% range. Putting this into context, new staff would require permanent funding which would have an impact on the budget and could create issues if that funding isn't there. Finally, the third question brought into play three areas that could have impacts one way or the other regarding the 2026 tax levy. The first is a spot of good news in that the Flats on 21 apartment complex no longer has access to tax abatements after it expires this year, which will add $48,000 of new tax base to the city books. However, at the same time the city — like every other governmental entity — will have to consider the impacts of inflationary costs regarding things like materials, vehicles, utilities and more. Further complicating the process is that the State Legislature has thus far failed to clear its own budget, bringing into play a likely special section to get it sorted out. Further adding to this is that one version of the state's budget included a possible reduction in Local Government Aid of approximately $300,000. This will impart a level of uncertainty in the City Council's work as any work done between now and the finalization of the budget could be impacted depending on what they do at the state level. Even though the council didn't make any concrete recommendations regarding the budget Monday night, it did hold a discussion and vote on the possibility of creating a budget committee that Council Member Jason Baskin argued could help the council stay on top of the process throughout in a timely fashion. Ultimately, it failed by a vote of 4-2 (Baskin had to leave before the vote) with some members fearing the optics of doing work behind closed doors, even though ideas would still be brought to regular council meetings for public conversation as the whole council. Council Members Mike Postma and Jeff Austin voted in favor of it while Rebecca Waller, Paul Fischer, Oballa Oballa and Laura Helle voted against. Still, the conversation did prompt the idea of holding more council meetings during the process that would maintain the spirit of what Baskin proposed. As for the timeline itself, department heads will receive budget documents and direction by June 16 and are expected to return those documents by July 11. Further budget refinement will take place with the council following that with a goal of setting a proposed tax levy and preliminary budget at the Sept. 15 meeting. State law requires these figures to be approved by Sept. 30. The Truth in Taxation Hearing will take place sometime between Nov. 25 and Dec. 12 with the final adoption slated for Dec. 15.
Yahoo
28-03-2025
- Business
- Yahoo
Minnesota Senate Democrats propose budget cuts amid bleak financial outlook
Majority Leader Erin Murphy. DFL-St. Paul, and DFL caucus members outline their focus and work ahead for the 2025 session at a press conference February 10, 2025. Photo by A.J. Olmscheid/ Senate Media Services. Minnesota Senate Democrats released two-year budget targets Friday that would enact nearly $2.5 billion in cuts over the next four years as the state faces a multi-billion dollar deficit unless lawmakers take action. The Senate Democratic caucus' targets say they would leave $2.4 billion on the bottom line over the next two years, and would avert a deficit in the following two-year cycle. But there's a major caveat: They don't account for inflation, which is expected to drive up costs by around $1.1 billion in the upcoming budget, although some economists expect even faster inflation given the Trump administration's tariffs. That means cuts will be more widespread and deeper than reflected in the targets, as agencies will face rising costs without money appropriated to cover them. State workers — whose compensation typically comprises the bulk of many agency budgets — are sure to demand pay raises that keep up with inflation, for instance. Budget targets are guidelines for legislative committees that determine how much money each committee has to spend or needs to cut for the 2026-2027 budget. Targets are subject to change, and often do, as lawmakers create their biennial budget in the remaining weeks of session. The Legislature must pass a budget by June 30, though the Legislature is scheduled to adjourn May 19. Minnesota's increasing costs are outpacing revenues and could cause a projected $6 billion budget deficit in fiscal years 2028-2029. Senate Democrats want to avoid the deficit by forcing agencies to eat the cost of inflation. That could lead to staff reductions, program cuts and other cost-saving measures. The Senate Democrats' budget targets cut spending on health and human services, environment, energy and transportation, while cutting education in the second biennium. Senate Majority Leader Erin Murphy, DFL-St. Paul, said in an interview that the budget targets are based on the latest forecast and don't take into account cuts at the federal level. Murphy said the state's $3.2 billion in budget reserves will help Minnesotans fare whatever future federal cuts, freezes and uncertainties affect Minnesota. 'We've kept the budget reserve … intact so that we have some cushion and the ability to manage at least some of what we might get from the trifecta in Washington, D.C., that seems hell bent on making deep cuts that could hurt families, schools, communities and our health care system,' Murphy said. Murphy didn't offer specifics about how lawmakers will achieve the cuts included in the budget targets. The Senate Taxes Committee, according to the targets, has a target cutting $365 million from their budget, i.e., by either raising taxes or cutting tax subsidies or Local Government Aid, which is in the Taxes Committee's purview. Gov. Tim Walz has proposed lowering the state's sales tax from 6.875% to 6.8% — saving Minnesotans 75 cents for every $1,000 they spend on taxable goods. Walz has also proposed taxing professional services that are currently exempt from sales tax, including legal, banking, brokerage and accounting services. Combined, the sales tax changes would generate around $185 million over the next two years. Murphy would not say whether Walz's sales tax proposals would be included in the Senate Taxes Committee's budget target. The biggest increases in the Senate DFL's targets include $100 million for the Higher Education Committee and $106 million for the Judiciary and Public Safety Committee. Murphy said that in higher education, lawmakers will earmark some funds to the Minnesota State Grant program — i.e., college financial aid — which is facing a $211 million budget shortfall. For the Judiciary and Public Safety Committee, much of the money will go toward the courts and Department of Corrections, Murphy said. The Minnesota House, which is tied 67-67 between Republicans and Democrats, will present joint budget targets early next week, a House DFL spokesperson said. Republicans and Democrats had a long running debate about how to treat inflation in state budgets. For many years, Democrats sought to include inflation in the state's projected costs as a more accurate depiction of the budget outlook. Inflation is reflected in the rising cost of everything from construction to gasoline to fleet vehicles — and especially in areas where the government spends the most: health care and education, and especially wages. By not including inflationary costs, Democrats argued, the budget forecasts were giving the public a deceptive picture of the government's ability to provide services. So, in 2023, Democrats passed a bill to require inflation to be included in both sides of the ledger in the budget forecasts of Minnesota Management and Budget, which is the state's budget agency. 'If we want to create an honest and responsible budget for Minnesota, we need an honest picture of our state's finances,' said Sen. John Marty, DFL-Roseville, in 2023. 'Just like a weather forecast, we want a budget forecast that has the most accurate information available to us, which will allow us as policymakers to make the most informed decisions possible with our budget. No business would make budget decisions based on budget projections that factor in inflation on the revenue side of their business, but not the expenditure side. Neither should state government.'
Yahoo
08-02-2025
- Politics
- Yahoo
EDITORIAL: Super disparities
The best budget decisions, it would seem, are those that receive broad support. So on the face of it, a proposal in the Minnesota Legislature that calls for a constitutional amendment to require a three-fifths majority vote in the House and Senate on income, sales and property tax decisions holds a certain appeal. But upon deeper examination, we see problems – really big problems. Most alarming of all, this amendment has the potential to paralyze rural Minnesotans' voice in the state's fiscal matters. In its wake, basic services such as police protection, K-12 education, higher education and even nursing home care in rural areas would see severe impacts. Budget decisions should require a thoughtful, studied legislative process. But if this supermajority amendment passes, a minority of legislators could hold the budget process hostage. Special interests – especially those of the metro area, where the population base is concentrated – would receive an unfair advantage. Growing inequities between wealthy metro interests and poor rural interests are the last thing Minnesota needs. Legislative gridlock already is a constant fear, fueled by last summer's impasse when only a simple majority was needed to make tax decisions. Think of the mess a supermajority consensus would create. Sixteen other states, including California, already have similar constitutional amendments. Anyone who follows California's nightmarish financial situation should realize this isn't a good idea. But that isn't stopping a zealous group of lawmakers in St. Paul. In the Senate, the amendment bill is sponsored by Sen. Benjamin Kruse of Brooklyn Park. The House version is sponsored by Rep. Steve Draskowksi of Mazeppa, and is supported by a number of GOP representatives, including Rep. Ron Shimanski of Silver Lake. Frankly, we don't know how Mr. Shimanksi could possibly support legislation that could be so detrimental to the people of McLeod and Meeker counties and the rest of rural Minnesota. This amendment definitely favors urbanites. If this amendment passes: < Programs such as Local Government Aid – which help pay for basic services in cities such as Hutchinson and Litchfield but are hardly needed in property-rich suburban communities – would be shoved aside to pay for other state spending priorities. < Education funding could be reduced, forcing rural Minnesota school districts – which tend to be property poor compared to their metro cousins – to doubly lose because they'd have to ask voters for additional funding to keep schools operating at functional levels. < Funding for nursing homes could become tighter than ever, forcing some to close, causing rural Minnesota communities to lose their largest employer. < Funding for higher education could shrink, causing tuition to rise and possibly result in fewer class offerings or even the closing of some institutions, which would more likely affect rural areas. Worst of all, the amendment could lead to more constitutional amendments, which in the end would result in legislating through the Constitution, a horrible notion that circumvents any form of a representative democracy. Rural Minnesota needs to stand its ground – and it has many defenders. Groups opposing the supermajority amendment include the Coalition of Greater Minnesota Cities, the Minnesota Taxpayers Association, the Minnesota Council of Nonprofits and others. Partly because of its supermajority amendment, California can't pay its bills or its state workers. Minnesota isn't in that situation now, and never has been. In fact, it generally has prospered during its 154 years of majority rule. Why fix something that isn't broke? (Editorials are written by Publisher Matt McMillan and Editor Doug Hanneman. They can be reached at mcmillan@ or hanneman@
