The local governmental units in Faribault County — as well as the whole state — got a big dose of bad news last week.
The estimated cuts in local government aid payments to cities and counties was announced.
Granted, they are listed as ‘proposed,’ but they were large enough to take the breath away from several local administrators, and render elected officials almost speechless.
Stories in this week’s Register have the details. Faribault County could lose $389,000. Blue Earth’s share is $235,000, Wells is $135,000 and Winnebago $84,000.
Plus, smaller towns in the county are being affected with this round of cuts. The last unallotments had cities under 1,000 population protected. This time they are not.
This means Elmore is facing the possible loss of $36,058, Kiester $33,700, Bricelyn $21,460 and Easton, Frost and Delavan approximately $12,000 each.
In a county our size, this is some serious coin when it is all totalled up. By rough calculation, this round of cuts, if they come to pass, will mean nearly $1 million in lost revenue in our county.
As a person studies the ongoing budget cutting, the scenario gets worse.
Each of the local governments have already had to trim a significant amount from their 2010 budgets because of cuts made by the state last year.
Then they set their levies, and their budgets.
These new large cuts are on top of those already made. Several elected officials shook their heads in amazement when they heard the news, and commented that they really didn’t have any idea what would have to now be whacked off their 2010 budgets.
This time, one county commissioner said after their meeting, there is going to be blood let.
He meant that this new round of cuts is going to seriously affect people — from employees to citizens who rely on the county to furnish services.
Local mayors and councils echoed those sentiments.
Blue Earth, for an example, is slated to lose nearly a half million dollars in state aid. Although the state says the cuts are in the 8.16 percent range, Blue Earth’s is more like 27 percent.
That means Blue Earth will have trimmed $428,000 from their 2010 budget – they already slashed $189,000. Now they have to red line another $235,000.
Not an easy chore. Especially since the budget has already been in place for two months.
There are other resources, of course. The city could dip into reserves. However, much of that money is designated for certain projects.
The city also has the right to ‘levy back’ the LGA cuts. What that means, in essence, is that the city can go beyond their levy limit next year and increase the levy by an amount to cover the loss of LGA this year.
There are some problems with that idea, of course. One is that we citizens are already paying a good chunk for our property taxes right now. The council is aware of that, and has traditionally been hesitant to pump up the levy by too large of a percentage in any given year.
The second problem is that it is a year too late. The cuts will have to be made before any increase in levy would ever be seen.
One more problem is that this financial crisis in the state is probably not over. More cuts in 2011 could be likely, and the cycle would continue — the state cuts LGA, the cities trim budgets and raise property taxes.
This latest round of state aid cuts is not set in stone. This is listed as a proposal. Most local officials, however, fear this will soon move from being proposed cuts to actual slashed funds.
Perhaps the eventual numbers will be lower. Maybe this was the high end of what is possible, and the actual cuts will be lower.
Maybe all this snow will melt without any flooding problems, too.
But, I doubt it.