Editorial: Awash in red ink, cities seek advice - Star Tribune

Editorial, Star Tribune, June 28, 2010

Changes of a different scale are now on the horizon.

If a new Humphrey Institute analysis is correct, Minnesota's next governor won't be able to justify cuts in aid to cities by pointing at positive city fund balances, as the last two governors have done. In cities large and small throughout the state, those balances are on the verge of depletion.

A budget deficit is in store for virtually every Minnesota city by 2015, warned the new analysis, commissioned by the League of Minnesota Cities. If spending and taxing patterns are left unchanged, deficits will swell on average to 35 percent of city budgets by 2025, it said.

Of course, spending and taxing trends in Minnesota's 854 cities will not go unchanged. When city costs exceed revenues, an adjustment is mandatory. State law does not permit cities to carry deficits on their books from one year to the next.

What the HHH Institute analysis really says is that the spending cuts and property tax increases that cities imposed over the past decade have not been sufficient to stabilize city finances. More drastic cost-saving and revenue-raising changes are unavoidably ahead.

That's so despite a doubling of city property-tax levies in the past decade, with a growth rate far exceeding the rate of inflation, while virtually every city has reduced government services and cut staff. Many cities have frozen employee wages. Mayors around the state came to the Capitol last month to report that cuts are now taking a toll on police and fire services -- the last things local elected officials want to put on the chopping block.

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DFL candidates for governor trade barbs over taxes - Minnesota Public Radio

Tim Pugmire, Minnesota Public Radio, June 9, 2010

St. Paul, Minn. — Margaret Anderson Kelliher, Mark Dayton and Matt Entenza all agree taxes should be raised, but they recently started arguing over the scope and the amount of those tax increases.
Mark Dayton has been campaigning for months on a "tax the rich" message. Lately, he's been adding new details to the proposal to increase the income tax rate for wealthy Minnesotans. During a recent gubernatorial forum in St. Paul, Dayton declared that he was the only DFL candidate willing to raise $5 billion through tax increases and tax compliance.

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