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Forum staff reports, Published May 18 2010

Local impact of Minnesota legislative cuts muted

The close of Minnesota’s legislative session didn’t appear to bring major changes for local entities.

Moorhead Mayor Mark Voxland said the budget agreement reached on Monday by state lawmakers and Gov. Tim Pawlenty likely won’t affect the city’s 2010 budget.

He said the challenge remaining for the city is developing its 2011 budget amidst an ambiguous revenue climate.

Still, he said it was confusing Monday trying to determine what the Legislature’s actions will mean for local governments.

“The state of Minnesota wants us, as local governments, to be transparent, but they (lawmakers) are the most opaque group in the world,” Voxland said. “They don’t let the citizens in on what’s going on until after they’re done voting.”

Clay County Commission Chairman Kevin Campbell said county officials were working Monday to assess what the state budget picture means for things like medical assistance, which is administered at the county level.

He said if a significant cut is coming for the current year, it is unlikely the county can do much to make up the difference.

“At this point in time, it would certainly be difficult for us because our budget is done and we really have no way of getting resources,” Campbell said.

For local colleges and universities, the close of the legislative session was a non-event.

Minnesota State University Moorhead and Minnesota State Community and Technical College had been planning for reductions in state spending, and Monday’s decision to cut $100 million from higher education just solidified the numbers they were already working with.

“For us, that is exactly what we’ve been planning for,” said Minnesota State University Moorhead Budget Director Jean Hollaar. “It’s no better, no worse.”

Both colleges will continue to keep tight controls on spending and hiring in anticipation of further budget problems in the next biennium.

The new state budget will also delay $1.9 billion in state payments to K-12 schools. It means that at the beginning of next school year, schools will receive 70 percent of their funding for the year, down from 73 percent this past fall and down from the 90 percent they received at the outset of previous school years. The payment delay last fall spurred a flurry of borrowing from cash-strapped districts.

For the Moorhead School District, said Assistant Superintendent Wayne Kazmierczak, “the change is significant because that’s another $1 million in delayed payments and less aid we’ll be receiving from the state for the next school year.”

In light of this development, district officials will need to determine if the district should borrow more than the $5 million it did last summer to meet its cash flow needs.

“It puts a lot of districts in a precarious situation in terms of trying to maintain a fund balance and not receiving state aid in a timely fashion” Kazmierczak said.