LGA cuts hit hard in Lauderdale

01 Aug 2011

When Lauderdale residents gather for the annual city celebration A Day in the Park on Saturday, Aug. 20, something will be missing.

The storied parade that wound through the residential streets of this inner ring suburb of 2,364 people each August for years has been canceled due to budget cuts.

City council member Mary Gaasch’s seven-year-old daughter cried when she heard the news, Gaasch said. “She wanted to bring her piggy bank to city hall,” to help with the budget crunch the city is experiencing.

Eliminating a summertime parade that took staff time to organize is a mere nod to the belt-tightening the city has experienced in the last four years, as the state cut Local Government Aid (LGA) to cities.

Between 2008 and 2010, Lauderdale, with a city budget of approximately $1.13 million—more than half of which goes toward public safety—saw its state aid cut by $208,524. The state budget recently signed by Gov. Mark Dayton cuts another $214,848 from the city’s 2011 and 2012 budgets.

“I’m gravely concerned about the cuts to LGA and the future of small cities and big cities in Minnesota,” Gaasch said. If the city does not find a way to raise revenue, she said, “Lauderdale will not be able to survive.”

The Lauderdale City Council is asking residents to attend an Aug. 24 meeting to give feedback on some cost-cutting and revenue-generating actions that include opening a municipal liquor store, reducing the number of hours of police patrol services or consolidating with another city—an option “almost too horrible to contemplate,” Gaasch said. The meeting will begin at 6:30 p.m. at Lauderdale City Hall, 1891 Walnut St.

“I was shocked to see that one of the options is consolidation,” said State Rep. Mindy Greiling, whose district includes Lauderdale, Roseville and the village of St. Anthony. “That tells me how very serious it is. They only have one police officer. They really have nothing left to cut. My other two cities, St. Anthony village and Roseville, are flusher and bigger and don’t even get LGA, and now Lauderdale is squeaking by with a lot less.

“There needs to be a fair way to give police and fire services and maintain roads for people in all towns without having the people living there absorb it all with property taxes,” Greiling said. “I am a strong believer in Local Government Aid.”

LGA began as a property tax–relief program in the 1971 “Minnesota Miracle,” a series of legislative reforms that fundamentally changed the way government was financed in the state.

It was established to provide fairness in property taxation across the state. The underlying philosophy of the program is that all communities have the right to basic services such as police and fire protection, libraries, parks and recreation programs and safe roads. Cities pay for these services through a combination of property tax revenues and state LGA payments. The state distributes LGA to cities based on a formula that identifies a city’s ability to raise revenues. Cities with higher property wealth, like Roseville and St. Anthony village, do not receive LGA. Municipalities with little industrial or commercial property, like Lauderdale, can’t cover the costs of public services through property tax revenues alone. LGA helps cover those costs.

The city of Lauderdale budgeted for potential 2011 and 2012 cuts through spending cuts and staff wage freezes. Yet, in 2012, even if the city eliminated all non-mandated services, such as city events, staffing at the ice rink warming house, park and recreation programming, the city newsletter and one of its five city staff members, a significant budget gap would remain.

“We can raise our levy, but we can’t raise it enough to cover all the different potential costs,” said Gaasch. “If we had no LGA at all and tried to raise the levy we could never raise it enough to provide the services that the state mandates.”

Those mandates—which include stormwater management and election administration—take up an estimated 50 percent of staff time. “Cutting staffing is not always an option,” Gaasch said. “The only way to cut costs is to cut police services.” Public safety is the largest chunk of the city’s budget: 56.4 percent or $637,787. Lauderdale contracts with the St. Anthony Police Department for one 24-hour patrol (at a cost of $605,278 per year) and the Falcon Heights Volunteer Fire Department ($32,500 per year).

And the only option for revenue generation is the municipal liquor store, she said. “I myself don’t drink. I never imagined I’d be in the position to say let’s try this out.” Bringing a municipally run business to the Larpenteur and Eustis area could bring other business to the area, Gaasch said.

She knows that some residents on Larpenteur Avenue are concerned about development along that street, “but it’s been zoned [for that type of development] for many years.” The positive aspect of having a municipal liquor store is that the city has some ability to control and influence the kind of business that develops there, Gaasch said. The city would control hours and parking.

Concerns that a liquor store would bring more crime to the area aren’t warranted, Gaasch said.

St. Anthony Police Chief John Ohl said that’s not an issue, she said. “Bars are a problem, not liquor stores.”

“Not one of the fixes would solve the entire problem,” Gaasch said. “If we had some combination of the three, maybe we could become financially independent.”

“I would have a heavy heart if there wasn’t a Lauderdale,” Greiling said. “Something serious is lost if they have to consolidate.”

Greiling would like to see reform in the LGA program. “Some cities are getting more than what they need and some aren’t getting enough. If it’s more fairly distributed you’d get more support for it, but to get rid of it all together is criminal and very, very unfair,” she said.

“We are a rich enough state to be able to afford LGA for those who need it. The governor really fought hard to have it not cut more than it was. It could have been a lot worse. For some cities this is small potato money, but for Lauderdale this is a catastrophe.”