Albert Lea faces $400,000 shortfall
Published 3:20 pm Saturday, December 20, 2008
ST. PAUL (AP) — Gov. Tim Pawlenty took a scalpel to state aid for cities and counties, human services programs and higher education on Friday, trimming $271.4 million in unspent state money to fix a $426 million near-term deficit.
The cuts will withhold $13 million from Minneapolis, $5.7 million from St. Paul, $1.9 million from Rochester and $1.7 million from Duluth when state aid checks go out at the end of next week.
The cut for Albert Lea will be about $400,000, and it will be about $300,000 for Freeborn County.
Albert Lea City Manager Victoria Simonsen said Albert Lea had been scheduled to receive a check of about $2.6 million. Because that won’t happen, she said the city will ask the City Council to cover the shortfall using reserves. She said the council has the option to call a special meeting — likely to take place the short week before New Year’s Day — to decide how to make up for $400,000.
Simonsen then would present several options to the council: cutting services, programs, staff or even absorbing it through reserves. If it absorbed it through reserves, the City Council then likely would try to find a way to rebuild the reserves. Albert Lea has a history of maintaining its reserves.
The state delivers checks to local governments in December and June. Albert Lea had expected to get a total of $5.4 million in state aid for the fiscal year. The $400,000 cut represents a 7.4 percent cut in state aid for the city.
Mayor Randy Erdman, whose term ends in December, said it can be hard for the city to handle cuts in state aid if it relies to heavily on state aid to make its annual budget. He said he had been working toward getting the city budget away from too much reliance on state assistance.
The city figures can be viewed as a PDF on the Minnesota Department of Revenue’s Web site.
Cities with populations of less than $1,000 face no cuts. Wells will have a cut of about $60,800. New Richland’s cut is close to $25,400.
Freeborn County Administrator John Kluever could not be reached for comment.
The county figures can be viewed as a PDF on the Minnesota Department of Revenue’s Web site.
Also on the hit list: the University of Minnesota and Minnesota State Colleges and Universities system, which will lose $20 million each, and $73 million worth of human services outlays for programs including medical education, hospitals, chemical dependency, mental health and adoption assistance.
The Republican governor used an executive power called unallotment to pull back scheduled spending after draining the state’s $155 million rainy day fund, and warned that more cuts might be needed early next year for the budget that ends in June.
“It’s not ideal or positive, but I think in the light of the crisis that we’re facing we tried to make those unallotments or decisions that would be least harmful,” Pawlenty said at a Capitol news conference.
The state also faces a $4.85 billion deficit for the two-year budget cycle that runs through mid-2011.
Totaling $110 million, the cuts to cities and counties were smaller than some had feared. Cities with fewer than 1,000 residents and four small counties were untouched. Pawlenty said he expected local governments to freeze salaries and cut unnecessary departments focused on arts, environmental and human rights programs while avoiding cuts to public safety.
Even so, Jim Miller, executive director of the League of Minnesota Cities, said some cities would have no other choice, even though local officials don’t want to target police or firefighters.
Pawlenty said he will also cut $42.2 million from unspent state agency budgets in January, after most departments outline their recommendations for reductions by Jan. 1.