Spot asked a good question: how much do the cities in Linda Runbeck's district contribute to the state tax coffers?
It's an important question to ask. Linda Runbeck is delivering an increase in Local Government Aid to her district while slashing LGA for the economic engines of Minneapolis, St. Paul and Duluth.
Two cities in Runbeck's district are certified to receive LGA in 2011, Circle Pines and Lexington. Circle Pines is scheduled to receive $233,811 in 2011. This is a 15% increase over 2010's certified amount, and a nearly tenfold increase over what they actually received ($27,244) in 2010.
If the property tax "reforms" proposed by Runbeck pass, she'll succeed in simultaneously delivering a windfall to her district while obliterating the cities.
Lexington, another city in Runbeck's district is certified for $382,922 in 2011. The tax bill preserves the 2011 certified amounts for suburbs. This means that Lexington would see an increase in 2011 from what they received in 2010 ($296,869). This is quite a windfall for the cities in the district of the legislator who charges that LGA creates "dependency" and needs to be axed.
Last week, Mayor R.T. Rybak argued that Minneapolis contributes an enormous amount to the state tax coffers. Rybak stated that Minneapolis contributed $367.5 million more to state coffers through sales and business taxes than it received in LGA. This figure was confirmed by Poligraph.
Looking at just sales tax revenue ($380 million), before any cut Minneapolis would receive about 23 cents in LGA for every dollar contributed to the state through sales taxes. How does this compare to the cities in Runbeck's district?
According to the most recent sales tax figures from the Minnesota Department of Revenue, Circle Pines (FIPS code 11494) contributed $665,744 in 2008 Sales Tax, Lexington (FIPS code 36836) returned $1,054,128 in 2008 Sales Tax. This means that Circle Pines will get back around 35 cents in LGA for every dollar in 2008 sales tax paid. Lexington will get back 36 cents in LGA for every dollar in 2008 sales tax paid.
Of course, that's not the whole picture - Runbeck is cutting Minneapolis's LGA allocation by 25% in 2011, and eliminating it by 2015. EDIT: This cut is from the paid 2010 amount for 1st class cities. This means that with the planned cut, Minneapolis would receive $48,601,701 in 2011 LGA, compared to the certified 2011 amount of $87,540,435 - a cut of nearly $40 million in 2011 alone. In 2011, Minneapolis would receive 12.7 cents in LGA per dollar in sales tax paid, just more than 1/3rd the rate of the cities in Runbeck's district.
The two cities in Linda Runbeck's district not only get LGA at a higher rate of sales tax paid under current law, but under her changes, they will get LGA at a rate double what Minneapolis gets, as measure by LGA/Sales tax paid.
Oh, and there's a provision to approve a TIF district in Lino Lakes thrown in for good measure. Cuts for thee, but not for me, indeed.
Spot adds: You will also be interested in the first post in the Grifter Princess series, and Aaron's post that inspired it: Screw the cities.
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