FFM Bulletin 6/16/09

LGA City Spotlight: Mankato

The City of Mankato has taken a prominent role in the debate over Local Government Aid (LGA), the $1 billion state program that redistributes state tax money to city governments. Mankato has joined forces with groups like the Coalition of Greater Minnesota Cities - which claims that state aid cuts have left local governments "running on fumes" - and liberal think tank Minnesota 2020 to fight against LGA cuts. Mankato Mayor John Brady recently held a press conference with St. Paul Mayor Chris Coleman as part of a "Save LGA" road tour. Mayor Brady says LGA cuts are "creating a crisis in our community." And according to the Mankato Free Press, "Brady said it would be impossible [for cuts] not to affect public safety."

The city is especially concerned about the Governor's upcoming unallotment, in which they fear they could lose more than $3 million in aid over the next two years. According to the city's website, "cuts at this level equal the total budget of parks, or all of the funding for fire services or nearly half of Mankato's police or street budget." If this is the case, one would expect responsible city leaders to prepare for the worst and immediately begin eliminating non-essential programs and spending. If you're wondering if Mankato has done that, here's a small sample of the city's 2009 spending:

  • $690,000 to build a new hangar at the airport. According to public documents, the city is pursuing commercial aviation and will use the hangar "as an incentive to draw commercial business and air cargo service to the airport."
  • $700,000 for new youth baseball fields$3,840 grant for the Mankato Area 77 Lancers marching band
  • $2,500 grant for the Mankato Area Community Band
  • $7,300 grant for the Great River Energy Bike Festival
  • $1,300 grant for an outdoor movie night$1,500 grant for South Central MN Pride, an organization which "promotes visibility and pride for the Lesbian, Gay, Bisexual, Transgender, Questioning and Ally communities of south central Minnesota." Money will be spent on the organization's annual Pridefest.

The city is also paying for sidewalk poetry, which is precisely what it sounds like: poems engraved in city sidewalks. And they are building Storybook Farm, a "farm-themed animal park." Despite the mayor's claim that LGA cuts have created a crisis for Mankato, the fact is that the city's spending has actually increased their spending 30% over the past 5 years, from $17 million to over $22 million.

It's true that the City of Mankato stands to lose a significant amount of LGA in the coming biennium, but perhaps they should confront the issue by eliminating dubious or frivolous spending items like those detailed above instead of scaremongering about the loss of essential city services. Instead of raising the spectre of massive public safety cuts, they could detail the measures they're taking to trim their budget and eliminate non-essential spending.

Local Government Spending on Lobbying Up 10%

While many local governments complain of declining revenues and inadequate state aid, they apparently have plenty of money to spend on lobbyists. In 2008, local governments in Minnesota paid lobbyists $8.6 million, a 10-percent increase over 2007. Between 2004-2008 (years inclusive), local governments burned through $37.5 million of your tax dollars on lobbying.

The City of Minneapolis ranked first (worst) in the 2008 State Auditor's report, paying out $400,000 to lobbyists, followed by Hennepin County, St. Paul, Anoka County and the Metropolitan Airports Commission. Of total local government lobbying expenses, cities accounted for 37%, counties 34%, schools 10%, and other agencies 19%.

FFM's Upcoming Report on Health Care Reform

It's no secret that Congress is preparing to radically reform the American health care system. Health care reform has been a hotly debated topic at the federal level for well over 20 years, and it's important that every American taxpayer and business understand the proposals pending in Congress.

As such, the Freedom Foundation of Minnesota recently commissioned a health care study by renowned economist Arthur Laffer that will provide Minnesotans with critical information as we weigh the health care options currently under consideration in Washington.

We are all well aware of the current inefficiencies and weaknesses that impose excessive costs on employers, employees and entrepreneurs -- costs that often stifle economic growth in Minnesota. The Laffer report will provide Minnesota-specific details about how proposed health care reforms will impact our state and our businesses. This analysis is critical because the benefit from any health care reform plan must be judged relative to these current costs. Therefore, we will specifically analyze if the proposed reform plans lower or increase costs for businesses and consumers.

We expect to release this report in time for the annual congressional August recess. This will give each Minnesotan time to read the reform proposal, study Dr. Laffer's analysis and then share your questions and concerns with congressional representatives. Look to future FFM Bulletins for information about the release of the report.

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