ST. PAUL The bill reforming the formula for Local Government Aid funding for Minnesota cities advanced to the Tax committee in the Minnesota House on Wednesday as part of the Property Tax omnibus bill.
The legislation, which was drawn up by cooperation between the Greater Minnesota cities organization and metro cities, seeks to simplify LGA distribution into three city size categories with a maximum of three factors for each to determine the funds received by a city. The new formula also includes factors that adjust the total LGA appropriations with inflation and calculate the funds based on the need of a city.
The omnibus bill also includes items like a $157 million boost in funding for the Homestead Credit refund, $15 million for renters credit and a state tax on silica sand mining tax.
Representatives from cities in Greater Minnesota and in the metro area expressed strong support for the bill. Their only objection was the current form of the bill planned a $60 million increase in total LGA allocation for next year, which is less than the $80 million increase proposed by Gov. Mark Dayton.
The bill passed despite votes against it by Republican members of the committee, including Rep. Paul Torkelson (R-Rural Hanska) who had supported LGA reform in previous hearings. He echoed the Republican objections to the omnibus bill over the silica sand tax along with general spending and tax increases. Torkelson also mentioned his concern with including the clause that increased LGA total funding with inflation, stating that it seemed to lock in automatic spending increases that are not always needed.