Senate looks at township aid
BEMIDJI —Ron Kinn isn’t sure how the Turtle River town board is going to compensate for the extra snowplowing costs from this winter season.
“We’re just going to have to take a look at it, and maybe we’ll have to cut back on some of our other maintenance to make it up,” said Kinn, the town board’s chairman. “Because that’s about the only thing we can do.”
Like many townships, most of Turtle River’s budget goes to road upkeep. And one of the few ways to pay for it is through property taxes.
But tucked into the state Senate’s tax bill that passed off of the floor earlier this week is a provision providing township aid funding. That comes more than 10 years after towns were eliminated from the Local Government Aid program.
LGA has become an essential piece of many cities’ budgets. For Bemidji, that means a $2.9 million payment from the state in 2013.
But townships have had to go without that revenue source since 2002, said Kent Sulem, general counsel for the Minnesota Association of Townships. Since, townships have become increasingly reliant on property tax dollars to fund basic services.
“When the LGA was eliminated for us, we were approximately 50 percent property tax dependent,” Sulem said. “We are now nearly 74 percent property tax dependent. And when you look at the escalation, it started with the loss of the aid.”
Similar arguments have been made by cities that have faced LGA cuts in recent years. The Legislature is also poised to add LGA funding and reform how it calculates payments to individual cities.
The Senate is proposing $5 million for townships across the state, Sulem said. The tax bill calculates payments to individual towns based on characteristics of the town, including acreage, tax capacity of agricultural property, and population.
Mel Milender, an Eckles Township supervisor and Minnesota Township Association board member, said most townships pay for just three things: roads, fire protection and administration.
“You’re not going to find a lot of slush in a township budget,” Sulem said.
While a portion of their funds come from the state’s gas tax, Milender said it would help to have township aid as well.
“That would help us with our road problems and some of the infrastructure like bridges that have to be repaired on a regular basis,”
He added that more retirees are moving out of cities and into nearby rural areas like townships.
“It’s kind of a two-way sword,” Milender said. “You get more population, you get more demand for services, and the more demand for services, you need more money.”