LGA increase easing burden on cities

To the editor:

As the city of New Ulm refines its budget for 2014, the task is made much easier because of the actions taken by Governor Dayton and the legislature during the 2013 legislative session.

After years of cuts and stagnant funding, the governor and the legislature increased funding for the Local Government Aid (LGA) program by $80 million. Of this new money, $40 million will come to Greater Minnesota communities like ours. In the case of New Ulm, we are seeing an increase in LGA of $110,949. In addition to the increase in LGA, the governor and legislature also exempted cities from paying sales tax on most purchases, which represents a significant savings for property tax payers.

With this increase in LGA and relief from paying sales taxes we are able to set our preliminary property tax levy to an increase by only 3.08 percent. Due to unknowns, the City Council set it at this amount (3.08 percent) in case something unanticipated popped up. We received an unexpected Health insurance increase of 23 percent or $190,000. Without the LGA increase it is estimated the tax levy increase would have been 1.92 percent higher or 5 percent. Currently the proposed property tax increase is at 3.08 percent and may be dropped to 2 percent or 2.5 percent.

LGA is tremendously important to communities like ours. The work of the governor and legislature last session put the relationship between the state and local governments back on the right track. I would like to thank the governor and legislature for their investment in LGA and the work they did to strengthen communities across the state.

Robert J. “Bob”


Mayor, City of New Ulm

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