I was absolutely taken aback by Gov. Tim Pawlenty's radio show a week ago, which contained what can only be summed up as a drive-by rant on the city's finances based on a questionably loose interpretation of the facts. On behalf of the families, businesses and students that call Bemidji home, I must respond in an effort to set the record straight.
The governor is an outspoken critic of Local Government Aid, a program that helps cities provide essential services -- police, fire protection, libraries, parks -- at an affordable price to property taxpayers. Understandably, the governor doesn't like acknowledging the property tax increases and service cuts that result from state-level cuts to LGA funding.
In fact, since the governor took office in 2002, LGA has been cut by just over $1 billion cumulatively, and city property taxes have consequently increased over 60 percent statewide. In the last three years, the governor reduced an already underfunded program by $200 million via his unallotment power, again pushing property taxes higher.
That's a major public relations problem for someone who trumpets a "no new taxes" policy, and just as tax increases have been deflected to the local level, so has the blame. On his radio show, the governor used some fuzzy math to show that Bemidji hasn't been impacted by LGA cuts, when the truth is our LGA payment will be 26 percent less in 2010 than it was in 2003, a cumulative loss of $5.9 million, and the city lost nearly $1 million in the last three years through the governor's unallotments.
Occurring after the city's budget has been set, these last-minute LGA unallotments have forced us to rely on our reserves to make up the difference, which eventually could impact our long-term fiscal health and bond rating.
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To adjust for this reduced funding, the Bemidji City Council has been fiscally prudent and attentive to our residents' needs. For 2010, we are cutting $300,000 in services, which includes a freeze on city employee wages and benefits. On his radio show, the governor implied that Bemidji has been handing out wage and benefit increases like candy, and this is absolutely untrue.
For 2010, no city employee -- either union or non-union -- will receive a wage or benefit increase. Four out of five bargaining units have already approved these terms, and the final unit has indicated it will follow once the contract is negotiated. Our dedicated employees are willing to work with us to continue to provide the high quality services our residents have come to expect.
We also cut the city's community development director who oversaw our economic development initiatives, which was a very controversial decision in the community.
The governor further claimed that Bemidji is a "government town," and that may be true in one sense, although not in the way the governor intended: 43 percent of Bemidji's property value is non-taxable. As a regional center, Bemidji has a tremendous presence of government from federal, state, county and city offices. Consequently, the other 57 percent of the taxable property must pick up the balance.
Even so, through smart budgeting practices and investments, the city has kept its average annual property tax rate increase to 2.4 percent over the past 10 years and increased its tax base by 155 percent. By growing our tax base, we have been able to ease the burden on our families and small businesses.
In Bemidji, we're proud of the way we have planned for hard times like these, but make no mistake, cuts to LGA mean cuts to essential city services and increases in property taxes.
Bemidji now joins the growing legion of rural cities "featured" on the governor's radio show -- a list that includes Albert Lea, Wadena, and Mankato, among others -- that he apparently feels he can run better than the local residents. Rather than dispense his budgeting critiques from an isolated recording studio in St. Paul, I invite Gov. Pawlenty to sit down with me and my statewide counterparts to have a constructive conversation on the future he envisions for greater Minnesota.
Dialogue is a two-way street, and when the governor is ready to learn about the consequences of his policy decisions, the city of Bemidji will be here.
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Richard Lehmann is mayor of the city of Bemidji.
