Editorial: Be on lookout for back-door tax increases
Published 12:00 am Tuesday, December 3, 2002
As the state approaches a legislative session with a new governor at the helm &045; one who has said he won’t raise taxes &045; it’s important to be aware of how some budget-repair measures that look like spending cuts are actually tax hikes in disguise.
That would be the case if the state were to significantly trim its budget for local government aid (LGA), upon which many cities, including Albert Lea, rely to pay a large portions of their expenses.
Because cities must set their budgets before they know what the state legislature will do, the mere threat of LGA cuts may already result in higher taxation for Albert Lea. The city council is likely to collect the maximum tax allowed under state levy limits in anticipation of funding cuts. That means the city portion of property-tax bills is going up.
There may be some validity in arguments that everything must be on the table and that Minnesota’s cities should do their part to help the state balance its budget. But residents of a city like Albert Lea will likely feel the effects of services cuts, fee hikes or other statewide budget measures. They will pay twice if they also see property tax increases because of LGA cuts, when areas like the rich suburbs, which don’t rely on state aid for city budgets, avoid the penalty.
Above all, the state’s residents shouldn’t allow leaders to pass off LGA cuts as anything but what they are: Back-door tax increases.
Tribune editorials represent the opinion of the newspaper’s management and editorial staff.