Changes to the formula that the state uses for local government aid money and increased funding for the program mean Hopkins will go from zero local government aid in 2013 to $289,907 in 2014, according to the Minnesota Department of Revenue.
The omnibus tax bill—which passed the Minnesota Senate 36-30 just a few minutes before midnight Monday, the legislative session's legal deadline—pumps $80 million more into the local government aid (LGA) program. The aim is to help cities lower property taxes.
Click on the PDF to the right of this article to see a full breakdown of how cities across the state will fare.
The bill also bars most cities from increasing their levies by more than 3 percent this fall.
The extra LGA money is just a hair less than planned under an earlier version of the bill, which would’ve given Hopkins $290,199.
The influx of LGA money is a big change for a city that hasn’t been able to rely on LGA for years. Funding dropped from $855,000 to $420,00 between 2002 and 2003, according to House Research’s Local Government Aid Lookup tool. Hopkins received just $50,000 between 2004 and 2007. That money was halved in 2008 and dropped off altogether in 2009.
The city received notice in 2010 that it would start receiving $50,000 again in 2011—but the money never came through. By the spring of 2011, the state was embroiled in a budget dispute that eventually led to a state government shutdown that summer.
When Hopkins was still at the $50,000 level for LGA, it directed the money to the Hopkins Center for the Arts—reportedly in lieu of a local-option sales tax.
Finance Director Christine Harkess said arts centers struggle to keep a balanced budget and the LGA money helped close the gap. In 2012, for example, the $50,000 LGA allotment would’ve been enough to close the Hopkins art center’s $41,000 deficit.
But the center lost more than twice as much—$96,000—in 2011. Losses like those have added up to nearly $1 million over the years, Harkess said.
She and City Manager Mike Mornson plan to ask the City Council to direct the new LGA money to the art center in order to close that gap.
“We’re not putting it in the general fund because we’re not going to rely on it again,” Harkess said.
How do you think Hopkins should use the money? Should it go toward offsetting the cost of an existing expense in order to lower property taxes? Or is there a new amenity, program or service you’d like to see it used for? Share your thoughts in the comments section below.