Complainers.

That’s what Gov. Tim Pawlenty called the mayors and leadership of the cities of Albert Lea, St. Paul and Wadena Friday during a WCCO Radio Good Morning Minnesota radio broadcast.

Responding to press conferences held Thursday when mayors around the state called on Pawlenty to minimize cuts to local government aid, the governor said that instead of complaining about state aid cuts, cities need to do what other entities, businesses and people are doing right now and live on flat or slightly declining revenue.

Unable to reach a compromise with the Legislature about the budget, Pawlenty has stated he will balance the state’s budget through a process known as unallotment.

Through this process, he can reduce funding for any state program by whatever amount he deems appropriate starting July 1.

In his original plan presented in January, the governor proposed cutting LGA by $246 million over the next two years, and the leaders in many cities are getting nervous that Pawlenty may follow through with those proposals.

During what appeared to be a response to those concerns, the governor asked in the radio broadcast what cities are doing to streamline and whether cities are freezing salaries like what has been done on the state level.

“Many, if not all, have reserve funds, or rainy day funds, and they should use them,” Pawlenty said.

He also talked of the option cities have of raising property taxes to make up for any LGA cuts.

In Albert Lea, specifically, he said the city levied $4.7 million in 2009 and received $5.4 million in state aid.

“In other words, we pay more than half of the city of Albert Lea’s budget,” Pawlenty said. “We might ask why is it? What is it about Albert Lea that the rest of the state should pay half?”

Albert Lea City Finance Director Rhonda Moen said the last time Albert Lea’s LGA levels were above 50 percent was in 2002 when 52 percent of the city’s budget came from state aid. In 2009, the city is scheduled to get 37 percent of its budget from LGA if no cuts are made.

Moen said she thinks Pawlenty assumed property taxes and LGA were the only revenue sources for the city. He did not take into account other revenue sources such as licenses and permits, franchise fees and interest earnings. The city’s budget is $14.7 million not just $10 million.

“I’m disappointed that he’s using such unprofessional types of tactics in announcing us as the biggest complainers,” Albert Lea City Manager Victoria Simonsen said.

Simonsen said she will respond to the governor by educating him about the city’s current situation and about how property taxes have been raised more than 100 percent in the last five years out of an effort to reduce the city’s dependency on LGA.

“We do feel we have done what we can with the way the economy is,” Simonsen said. “We feel we have done what we need to locally to reduce dependency, and we are now at a point where we are competitive tax-wise with our neighbors. Going any more is going to create a hardship and be a deterrent to come to our city.”

Albert Lea Mayor Mike Murtaugh said he was surprised by Pawlenty’s comments and he, too, questioned the figures the governor used.

“The levy and LGA aren’t the only two pieces of the budget,” Murtaugh said. “They’re definitely the two largest pieces, but there’s other parts of it too.”

Regarding raising property taxes, he said he does not think the city’s residents can afford to have an extra burden placed on them because the state can’t come to an agreement about how to handle LGA.

“I do not look at LGA as a handout, a subsidy, whatever you want to call it,” he said.

LGA is similar to sending taxes to the federal government and expecting to get money back for projects, he said. The people of Minnesota are required to pay sales tax, income tax and motor vehicle registration taxes, to name a few, and then money is returned to cities and counties through LGA in an equitable manner.

Regarding dipping into reserves as Pawlenty has suggested, Murtaugh said the city is simply following the state auditor’s recommendations to have six months of the city’s budget in reserves. At the moment, Albert Lea actually has less because it had to cover the governor’s unallotment of about $400,000 in LGA in December.

Simonsen said she plans to put together a response to Pawlenty with members of the Albert Lea City Council to present at the Tuesday council meeting.

During the last five months, the city has hosted several ward budget meetings, formulated a citizens task force for and posted an online survey asking residents for suggestions regarding the budget. A common theme has been present to reduce LGA dependency.