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The new Republican majority in the state Legislature has wasted little time in proposing more cuts to local government aid (LGA) and city market value homestead credits (MVHC) as a way to address the state’s projected $6.2 billion deficit.
A bill introduced in the Senate Jan. 18 by Sen. Claire Robling (R-Jordan), who chairs the Senate Finance Committee, proposes permanent cuts to LGA and city MVHC reimbursements
The bill, SF 60, extends many of the unallotments that were ratified in 2010 as well as the supplemental budget cuts that were enacted in 2010.
And, as has been the case with previous proposals to cut LGA and MVHC, city officials are on the wonder seat as they wait for final legislative action.
Preliminary figures indicate Montevideo could see a reduction in 2011 LGA of $243,397 and a reduction of $122,902 in MVHC.
“Who knows what will happen?” said Montevideo City Manager Steve Jones this week. “So far it’s just a proposal, but we’re fully expecting them to take something.”
The city’s 2011 LGA allotment was set at $886,395, so the proposed reduction would put a serious dent in the city budget.
“If the Legislature makes cuts for this budget year, we’ll make it up out of either the capital improvement fund or out of reserves,” said Jones. “We could have taxed more in anticipation of losing more LGA, but we hate to do that.”
Overall, the bill would apparently reduce the state’s general fund deficit by approximately $1 billion, including $200 million in unspecified reductions for the remaining five months of the state’s 2010-2011 biennium.
In total, city LGA and MVHC reimbursements would be reduced by $143 million for 2011 and these reduced funding levels for LGA and MVHC will be made permanent, saving the state approximately $286 million for the biennium. These cuts are on top of the $56.5 million in cuts already imposed for 2011 in last year’s supplemental budget bill.
Noting that the city had been going through this process for several years, Jones said the constant not knowing what to expect was especially difficult.
The city has contingency plans in place if the state takes the LGA and MVHC cuts out of the next budget year, according to Jones. But the resulting cuts will be felt by city residents, he added.
“We’re at a place where we’ve cut everything we can cut,” Jones said. “There is no fat left. We have already reduced staff, which is where the majority of the money is spent.”
The majority of the city budget goes to public safety and public works, Jones explained. Further reductions will inevitably mean the city will have to cut employees.
“That means it will take a little longer to plow the streets, and there will be fewer police on the streets,” said Jones.
The new Republican majority in the state Legislature has wasted little time in proposing more cuts to local government aid (LGA) and city market value homestead credits (MVHC) as a way to address the state’s projected $6.2 billion deficit.
A bill introduced in the Senate Jan. 18 by Sen. Claire Robling (R-Jordan), who chairs the Senate Finance Committee, proposes permanent cuts to LGA and city MVHC reimbursements
The bill, SF 60, extends many of the unallotments that were ratified in 2010 as well as the supplemental budget cuts that were enacted in 2010.
And, as has been the case with previous proposals to cut LGA and MVHC, city officials are on the wonder seat as they wait for final legislative action.
Preliminary figures indicate Montevideo could see a reduction in 2011 LGA of $243,397 and a reduction of $122,902 in MVHC.
“Who knows what will happen?” said Montevideo City Manager Steve Jones this week. “So far it’s just a proposal, but we’re fully expecting them to take something.”
The city’s 2011 LGA allotment was set at $886,395, so the proposed reduction would put a serious dent in the city budget.
“If the Legislature makes cuts for this budget year, we’ll make it up out of either the capital improvement fund or out of reserves,” said Jones. “We could have taxed more in anticipation of losing more LGA, but we hate to do that.”
Overall, the bill would apparently reduce the state’s general fund deficit by approximately $1 billion, including $200 million in unspecified reductions for the remaining five months of the state’s 2010-2011 biennium.
In total, city LGA and MVHC reimbursements would be reduced by $143 million for 2011 and these reduced funding levels for LGA and MVHC will be made permanent, saving the state approximately $286 million for the biennium. These cuts are on top of the $56.5 million in cuts already imposed for 2011 in last year’s supplemental budget bill.
Noting that the city had been going through this process for several years, Jones said the constant not knowing what to expect was especially difficult.
The city has contingency plans in place if the state takes the LGA and MVHC cuts out of the next budget year, according to Jones. But the resulting cuts will be felt by city residents, he added.
“We’re at a place where we’ve cut everything we can cut,” Jones said. “There is no fat left. We have already reduced staff, which is where the majority of the money is spent.”
The majority of the city budget goes to public safety and public works, Jones explained. Further reductions will inevitably mean the city will have to cut employees.
“That means it will take a little longer to plow the streets, and there will be fewer police on the streets,” said Jones.
