A new plan from the Minnesota House would decimate state funding for cities and counties, leaving the state's local governments to largely fend for themselves.
The proposal, crafted by GOP members of the House Property Tax and Local Sales Tax Division, would cut nearly $300 million from local government aid by immediately slashing half of metro suburbs' state help and a quarter of big cities' aid from the state.
The plan would eliminate all state aid to metro suburbs by 2013, and by 2015 city funding would be gone.
Minneapolis Mayor R.T. Rybak was quick to denounce the proposal, noting that the city has lost $297 million in local government aid in the past decade.
In a prepared statement, he called it "a tax increase on middle-class families, a job killer for small businesses and a blatant attempt to divide communities from each other."
County aid from the state and market value credits also would be slashed or eliminated.
The proposal from House Republicans would sever a long-standing fiscal relationship between state and local governments that mayors and county officials say helps keep the municipalities alive. With nearly $900 million in cuts, it also would help Republicans close a $5 billion budget gap without raising statewide taxes.
The plan probably has little chance of becoming law. DFL Gov. Mark Dayton has been an ardent backer of the aid, sparing it in his budget plan, meeting with mayors to underscore his support and saying those who cut it are responsible for property tax hikes.
The House plan would largely spare outstate cities from such severe cuts, but pits suburbs and the urban core against smaller cities. Last week, mayors from places big and small said they would not tolerate such a divide-and-conquer approach.
The coalition that represents the state's small cities promptly shot down the proposal Saturday in a statement: "We are pleased that the proposal recognizes the importance of LGA to homeowners and businesses in greater Minnesota, however we strongly disagree with the exclusion of metro and suburban communities from a policy that has benefited the entire state."
The proposal also would cut $118 million from a renter's credit program that gives renters with low and moderate incomes a tax refund to offset property taxes.
The House committee report was released late Friday night, prompting DFLers in the Legislature on Twitter to dub it a "super secret" plan.
Rachel E. Stassen-Berger • 651-292-0164
