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Hopkins’ LGA Could Climb to Nearly $300K

A bill that changes the way state aid is calculated could start money flowing into city coffers again.

After years without local government aid, Hopkins could see payments balloon to nearly $300,000 under a new proposal that would inject tens of millions of dollars into the system and change the way those millions are distributed.

The bill by Moorhead Rep. Ben Lien (DFL-4A) would add $80 million to the $426 million that the state is scheduled to spend on local government aid (LGA) in 2014.

It would also create a new formula that adjusts aid based on its “aid gap”—a product of how the formula determines “unmet need,” according to the House Research bill summary. For so-called “large cities” that have more than 10,000 people, including Hopkins, the formula considers three factors in determining need per capita:

  • Jobs per capita,
  • Percent of housing built before 1940 and
  • Percent of housing built between 1940 and 1970.

LGA is intended to help cities with greater needs than they can reasonably expect to fund through property taxes. In most cases, the money goes into a city's general fund, to be spent however city officials deem necessary.

If Lien's law passes, no city would receive less aid in 2014 than it did in 2013. But aid could decrease in later years if it was bigger than what the formula determined to be unmet need. Decreases could not be more than 5 percent of the city’s levy the previous year.

In all, 85 of the state’s 854 cities would not receive LGA in the initial year—down from 107 that do not receive it now, according to the Red Wing Republican Eagle.

The bill has united cities in the Twin Cities metro and rural Minnesota because they feel it would make LGA more predictable from year to year.

An earlier proposal from Gov. Mark Dayton also recommended setting aside $80 million more for LGA, but it didn’t tweak the formula so radically.

Hopkins was set to get . Under Lien’s bill, it would receive $290,199—an increase of about $16 per person.

That’s 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—and 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.

Use the search tools above to compare how cities would fare if the bill passes. The bottom box allows a simple search by name.

The top widget allows comparison by “city cluster”—groups of cities that have similar characteristics. The House Research Department just started using new city clusters March 6. Hopkins is in the “Established Cities” group. Click here to read more about city clusters.

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