Politics & Government

Mound Would Be Lake Minnetonka's Big Winner under New Local Government Aid Bill

The bill would change the way Minnesota calculates LGA but won't start money flowing into most Lake Minnetonka city coffers.

Years without getting local government aid will stay that way for Lake Minnetonka cities. 

Other Minnesota cities could see payments balloon under a new proposal that would inject tens of millions of dollars into the system and change the way those millions are distributed.

A bill by state Rep. Ben Lien of Moorhead (DFL-4A) would add $80 million to the $426 million that the state is scheduled to spend on local government aid (LGA) in 2014.

Find out what's happening in Lake Minnetonkawith free, real-time updates from Patch.

One Lake Minnetonka city would get LGA money only under the Lien plan: Mound gets nothing under current law or under the Dayton plan, but it would get more than $300,000 in 2014 local government aid under Lien's bill.

Long Lake is the only Lake Minnetonka city to get LGA now, and it would continue to get LGA under all three scenarios. Current law would see the city's share drop from $26,410 certified for 2013 to $18,834 in 2014. The Lien plan would maintain the current amount for 2014: $26,410. Dayton's plan would hike Long Lake's LGA to nearly $80,000.

Find out what's happening in Lake Minnetonkawith free, real-time updates from Patch.

All the other Lake Minnetonka cities (including the City of Minnetonka, not shown here) would stay at zero LGA under all three scenarios.

City Current Law 2013 LGA Current Law 2014 LGA Dayton Plan 2014 LGA Lien Plan 2014 LGA City Cluster Deephaven 0 0 0 0 High Income Suburbs Excelsior 0 0 0 0 Smaller Residential Cities Greenwood 0 0 0 0 High Income Suburbs Long Lake $26,410 $18,834 $79,660 $26,410 Established Cities Minnetrista 0 0 0 0 High Income Suburbs Mound 0 0 0 $301,450 Smaller Residential Cities Orono 0 0 0 0 High Income Suburbs Shorewood 0 0 0 0 High Income Suburbs Spring Park 0 0 0 0 Smaller Residential Cities Tonka Bay 0 0 0 0 High Income Suburbs Wayzata 0 0 0 0 Smaller Residential Cities

Lien's plan creates a new formula that adjusts aid based on its “aid gap”—a product of how the formula determines “unmet need,” according to the House Research bill summary.

LGA is intended to help cities with greater needs than they can reasonably expect to fund through property taxes. In most cases, the money goes into a city's general fund, to be spent however city officials deem necessary.

If Lien's law passes, no city would receive less aid in 2014 than it did in 2013. But aid could decrease in later years if it was bigger than what the formula determined to be unmet need. Decreases could not be more than 5 percent of the city’s levy the previous year.

Eighty-five Minnesota cities (out of 854 total) that would not receive LGA in the initial year—down from 107 that do not receive it now, according to the Red Wing Republican Eagle.

The bill has united cities in the Twin Cities metro and rural Minnesota because they feel it would make LGA more predictable from year to year.

An earlier proposal from Gov. Mark Dayton also recommended setting aside $80 million more for LGA, but it didn’t tweak the formula so radically. (Click on PDF thumbnail to see how Dayton's plan would affect individual cities.)

Check past LGA amounts for individual cities with House Research’s Local Government Aid Lookup tool.

Use the search tools above to compare how cities would fare if the bill passes. The bottom box allows a simple search by name. The top widget allows comparison by “city cluster”—groups of cities that have similar characteristics. The House Research Department only started using new city clusters March 6, 2013. Read more about city clusters.


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