Minnesota Public Radio has asked me to participate in an online debate about whether or not Minnesota should end local government aid now. Strong Towns released a report here earlier this year on local government aid and the impact of its eventual phasing out, which seems inevitable given its relative priority compared to other budget items. I've agreed to argue the "yes" side in this debate, which starts at noon today. You can follow it here live - and participate if you choose - or you can read the recap any time after we are done. Don Reeder with the League of Minnesota Cities will be arguing the other side and Michael Caputo of MPR will be moderating. They are both good guys and so this should be fun and hopefully informative.

I'm going to use the following as my opening statement for this discussion:

Whether or not we should end local government aid (LGA), it is going away. The state's budget problems are too big and stretch too far into the future for aid to cities to survive for much longer. Ending it now, or at least acknowledging that we need to think post-LGA, frees us up to have a deeper discussion on what is going on financially with our cities.

Most of them are long-term financially insolvent; that is they have more liabilities and obligations for things like infrastructure maintenance than revenue is created from those investments. Our cities today are not very strong, which is a function of the inefficient way in which they have developed. Instead of pinning our hopes to a volatile and dwindling funding source, our cities need to look at ways to shore up their balance sheets by getting a higher return off of their public investments; growing more efficiently and investing in growth more strategically.

LGA in its current form only postpones this discussion. It is doing more harm than good and should go away.

 

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