I have been trying to stay out of the fray, as I don't live in Minneapolis,
but I am compelled to correct some disinformation.

Minneapolis does not pay for water or sewer in the suburbs.  Minneapolis
does pay the Met Council for sewer infrastructure improvements, but it is
Minneapolis' sewer.  The Met Council lists a number of sewer improvements in
their capital improvement plan (page
54-55)(http://www.metrocouncil.org/environment/RatesBilling/CFP-2003.pdf)
that are identified as Minneapolis Projects.  The developing suburbs pay for
water/sewer infrastructure through connection charges and assessments to
property owners.  If Mr. Bonham has specific knowledge of some suburb in
which the Met Council is drawing funds from Minneapolis to fix someone
else's sewer, I would love to have a link to that info so I can read more
about it.

Minneapolis did run water pipes to some of the adjoining suburbs many years
ago, in order to sell them water from the Mississippi River.  The city is
still selling water to its neighbors, although New Hope, Golden Valley, and
Crystal are considering ending the arrangement and drilling their own wells.
In fact, there is a story in the Sun -
http://www.mnsun.com/story.asp?city=Robbinsdale&story=107509 Those water
pipes are probably the source of this urban legend.

As for Local Government Aid  - there were two major statewide programs used
to transfer money to cities' general funds.  For the 2002 budget year, HACA
(Homestead and Agricultural Credit Aid) was discontinued to cities, so that
the money could be directed instead to school districts, when the state
decided to fund a greater portion of education costs.  I am not sure what
sort of a cut that meant for Minneapolis, but for some of the outlying metro
area cities, it was a very significant cut - about 13% of Lakeville's
general fund. http://www.taxes.state.mn.us/reform/pdf/lagsummary.pdf talks
about the reasoning behind the change.

Now the state is looking for other things to cut. In that respect, perhaps
Minneapolis is a victim of its own success - having achieved a funding
formula that almost entirely cuts out the suburbs, the suburbs have little
reason to fight to preserve funding for the program.

LGA  is based primarily on how much a city spent in 1971.  Not a very
defensible purpose, but the program has served Minneapolis well over the
years.  Perhaps instead of throwing out the same arguments, it would be more
productive for the long run to try to define a valid purpose for LGA, and
adjust the formula so that it serves that purpose.  If you try to look at it
from Pat Awada's point of view, without demonizing her - you would see a
program that gives Minneapolis 262 times as much money per resident as Eagan
gets.  Is Minneapolis' need really 262 times greater than Eagan's?  Or is it
maybe 3 times, or 10 times, or 100 times as much?

It is interesting to read the perception that Minneapolis is subsidizing the
suburbs with its base of jobs, or that having Minneapolis get less LGA (but
still more than most everyone else) will create a "donut".   Having a strong
employment base is an asset.  Having your residents all leave your city to
go to their jobs is a drain on the local economy, because you have to
provide them with schools, parks, services, without a commercial/industrial
tax base to fund them.  Last time I checked, that is why they created the
Fiscal Disparities program.

It seems to be popular to paint the suburbs as rich, but when you look
closer, they have challenges too - just not ones that the state formulas
reward.  For example, imagine if the school enrollment in Minneapolis
doubled in less than 10 years, and you had to build new schools for all
those kids.  Granted, the city budget doesn't pay for schools, but the
taxpayer dollars that do pay for them come out of the same pockets.

So what is the purpose of LGA?  The state distributes specific aid for
things like police, fire, streets, pensions, health and human services, and
affordable housing - so is LGA really about providing basic services or
something else? Whether you are worried about losing your piece of the pie
or not - it is still valid to ask the question -  what is the goal of LGA,
and is it meeting that goal?

Wendy Wulff
Lakeville



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