More on LGA for Chisago County Cities

The state takes taxpayer dollars and provides Local Government Aid (LGA) to cities. The data in the charts below is found here and here and comments on it in a previous post.

The new LGA law provides $299,687 more to the ten cities than the 2008 certified amounts. This is a 15.6% gain over 2008 LGA, a significant gain. Together, Chisago County cities will receive 0.71% of the new $42 million statewide LGA.

The 15.6% gain of $299,687 LGA looks impressive when considered as a combined group of cities. However, while six cities have LGA gains, three cities break even and one city goes in the hole. The significant gains are concentrated on three cities (Stacy, North Branch and Rush City).

Column C in chart 2 lists the projections for 2009 that would have been the case under the old LGA law compared to the 2008 LGA.

If the old LGA law were carried into 2009, there would have been less money distributed, but eight cities would have gained LGA and two Chisago County cities would have lost LGA. The old formula made a more equitable distribution of LGA to more cities in Chisago County.

Chart 3 compares the new 2009 LGA amounts for each city to the amounts that were projected under the old 2008 LGA law for 2009.

The new LGA law provides $122,093 more dollars (299,687 - 177,594) to the ten cities than was projected under the old 2008 LGA law for 2009.

Chisago County cities will receive 0.71% of the new $42 million statewide LGA. Under the old law, the cities would have received 0.42% of the new $42 million statewide LGA. So the new law gains 0.29% more of the $42 million.

However, the new LGA law takes away money from six cities that would have been gained under the old LGA law. Six cities fared better under the old law (Chart 3). Three cities (Stacy, North Branch and Rush City) fare significantly better under the new law (Chart 1). Four cities (Harris, Taylors Falls, Wyoming and Shafer) are significantly hurt under the new law (Charts 1 & 3).

The old law was more equitable to more of the cities in Chisago County. Even though the new law provides more money, the distribution of that LGA is significantly inequitable.

Rep. Jeremy Kalin (D-17B) has touted his accomplishments in property tax reform. While he was part of securing $42 million LGA money statewide, he failed to make sure that the distribution formula was equitable to all ten cities that he represents. His vote for the new LGA distribution formula significantly helped three cities and significantly hurt four cities. That is nothing to brag about.

Furthermore, Kalin has locked these cities into this mode for the next two years. The new LGA formula provides a 2% increase for 2010 and a 4% increase the next year (see page 1 here). Consider these projections in Chart 4.

In 2010, both North Branch and Lindstrom will receive at least as much LGA as projected for 2009 under the old LGA law.

But even after the scheduled increases through 2011, Harris, Taylors Falls, Wyoming and Shafer will still not have received as much LGA as projected for 2009 under the old LGA law. These are the cities most hurt by Kalin’s vote for the new LGA distribution formula. It certainly appears that the old Republican distribution formula was much more equitable to the cities in Chisago County than the new Democrat distribution formula.