Members of Albert Lea’s new budget task force got their first hard look Monday at the city’s expected cuts to local government aid for 2009 and 2010.

In what was the group’s first of three planned meetings, Albert Lea City Manager Victoria Simonsen and Finance Director Rhonda Moen gave an overview of local government aid in Albert Lea, bringing the members up to speed about how the budget is formed.

“We are calling this a budget crisis,” Simonsen said. “The City Council is facing one of their largest budget cuts from the state in our history.”

In December, with two weeks left in the city’s fiscal year, Albert Lea’s local government aid was unallotted by about $400,000. If that weren’t bad enough, Gov. Tim Pawlenty has proposed to cut another about $500,000 in 2009 and more than $1 million in 2010, she said.

“We are facing significant cuts,” she said to the task force. “That’s why we need your help. We have already done all the trimming. We have to come up with another basically $1.5 million.”

She explained that local government aid was established in 1971 in Minnesota with a fundamental purpose of keeping property taxes equal throughout the state and making sure all citizens had reasonable access to public services.

She said the funding formula has been amended numerous times since it was formed, and Pawlenty has been a proponent of doing away with local government aid altogether.

This would greatly impact Albert Lea, Simonsen said.

In 2002, local government aid to Albert Lea was at its highest at about $6.4 million, representing 51 percent of the general fund revenue, she said. In 2009, it’s projected at $4.8 million, or 35 percent of the general fund. Though the dependency on state aid has decreased, Albert Lea would be severely impacted if additional cuts went into effect, she said.

Comparing 2002 to 2009, Simonsen said the city’s tax rate has more than doubled and the tax capacity went from $7 million to $11 million. But the city actually has four less employees now than it did in 2002.

The 2009 expected local government aid cut would be the equivalent of six police officers, or 25 percent of the force; enough to pay six firefighters; half the budget of the library; more than the entire recreation department budget or more than the amount to provide snow removal for one whole season, she said.

The 2010 expected cuts are the equivalent of the entire parks department, the entire budget of the library, 45 percent of the police department or 80 percent of the fire department, she said.

“This is a major hit to our general fund,” Simonsen said. If the cuts come to fruition, Albert Lea could become a much less attractive place to live.

And that’s why the city is trying to get back input from the community in several different ways, she said. In addition to the task force meeting, there will be meetings held in each ward to seek input.

Moen said in 2009, 66 percent of Albert Lea’s budget will go toward personal services, which includes wages and benefits, while other services and charges make up 27 percent. Supplies make up 5 percent and capital outlay is 2 percent. She said many people may find this surprising.

These numbers made a few of the task force members question the salaries of employees, which led to a brief discussion about union negotiations. Other people asked whether there have ever been layoffs and what the status is about overtime.

Finally, Simonsen and Moen presented a breakdown of the 2009 property tax on a $100,000 home. The city portion of the taxes would be 27 percent, or about $375.

Of that $375, the homeowner pays $89 a year for police protection, $36 for fire protection, about $9 for snow removal the entire year and $6 for street lighting, to name a few of the services.

Simonsen said people might look at their taxes differently once they realize the full breakdown.

Task force members began to brainstorm places that could be cut and will discuss those strategies at the next meeting. Though they did ask a few questions, they mainly listened to the presentation.

Simonsen said she will come back to the group with 45 different strategies of things that can be done to balance the budget. The group will figure out what the most important services are and which the community can live without.

She said she expects the changes to be permanent.

The next task force meeting is tentatively scheduled for March 16.