MARSHALL — With the state facing a $7.7 billion budget surplus, Minnesota cities are calling for investment in Local Government Aid, infrastructure projects and more.

On Thursday morning, members of the Coalition of Greater Minnesota Cities said their top priority for the 2022 state legislative session was a $90 million increase in Local Government Aid.

“LGA is the lifeline for Greater Minnesota cities. Without it, rural Minnesota would crumble, “Luverne Mayor Pat Baustian said.

The coalition is also calling for funding for water and sewer infrastructure, child care and housing grant funding.

Baustian, the president of the CGMC, was one of the speakers during a media conference call on Thursday morning. CGMC Executive Director Bradley Peterson said Minnesota’s budget surplus was a “once in a generation” opportunity to invest in areas like city water projects and child care.

“None of these issues are really new,” Peterson said. “City leaders have been talking about them since well before the pandemic. However, the last two years have amplified these challenges and highlighted the need for long-term solutions.”

Peterson was optimistic that state lawmakers would be willing to support using the budget surplus for needs like infrastructure projects, in addition to tax relief.

Peterson and Baustian said getting a $90 million increase in LGA was the coalition’s top priority for the upcoming state legislative session. LGA helps Minnesota cities pay for needed services without having to put bigger property tax burdens on residents, which Baustian said is important in small communities.

“Each city can use it for its own unique needs,” Baustian said.

Baustian said LGA makes up about 28% of Luverne’s annual budget. However, LGA funding hasn’t kept up with inflation and rising costs.

“Like other cities, our costs have increased a lot in recent years,” Baustian said. “Construction costs have gone up 35 to 50% over the last four years. We have an aging workforce, which drives up costs.”

This year the CGMC will also be asking the Legislature to pass a bonding bill that includes $299 million for water and wastewater infrastructure grant and loan programs.

“This funding is needed to make progress in addressing the backlog of water infrastructure projects across the state,” Peterson said. “Cities are willing to pay their fair share, but it is incredibly difficult to pay for these massive projects without a grant or loan from the state.”

Owatonna Mayor Tom Kuntz said his city has been trying to expand its wastewater treatment plant since 2017, but they’ve faced permit delays and other setbacks. During that time, the estimated cost of the project has more than doubled, going from around $25 million to $59 million.

“Obviously, this is a very expensive project for our community. We are seeking any help we can get from the state and other sources so that we don’t have to put the full cost burden on our local ratepayers,” Kuntz said.

Another key priority for the CGMC this year is child care. The coalition is requesting up to $20 million for a child care capital grant program, which would help local governments build or ezpand child care facilities. They’re also seeking $5 million for the DEED child care grant program to help create new and retain existing providers.

Baustian said child care is a crucial need for Luverne and other communities in southwest Minnesota. Before the COVID pandemic, Luverne had a shortage of 180 child care spots, Baustian said. Now, Luverne is short more than 250 spots.

“When we talk to our local businesses, all we hear is ‘What are you going to do about child care?'” he said.

Baustian said a shortage of housing is also a major concern.

“In rural Minnesota, there aren’t enough developers that have the cash and are willing to build in our communities,” he said. “We are also dealing with the issue of aging housing stock. When housing is already hard to come by, it is critical we are able to preserve and maintain the existing homes in our community.”

This year the CGMC is seeking funding for infrastructure grant and workforce development programs that will help cities address housing needs.