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Legilsative priorities for rural Minnesota: Local Government Aid to foster and secure growth

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ALEXANDRIA, MInn. The Minnesota Rural Equity Project's desire to bridge gaps and reduce disparities between Greater Minnesota and the Twin Cities metropolitan area may sound like a lofty goal, but it's quite simple at its core.

Everyone needs a place to live and the opportunity to make a living, every community needs basic infrastructure and the ability to provide essential services, and every business needs workers.

All of these elemental needs can be addressed through sound state policies and investments recommended by the project.

Among these and at the foundation of a strong community is Local Government Aid. LGA is the ultimate equity tool-- it was created in the 1970s as a means to ensure that all Minnesota cities are able to provide a similar level of services, regardless of their wealth.

Today, it makes up a significant portion of local revenue in many cities, including 65 percent in Crookston, 60 percent in Thief River Falls, 55 percent in Warren and 35 percent in East Grand Forks.

This legislative session, city leaders are seeking a $45.5 million increase in LGA funding, the amount needed to bring the program up to its 2002 benchmark. This modest increase would help all cities continue to provide important services and amenities while holding down property taxes for homeowners and businesses.

While LGA helps cities provide public safety, parks and libraries, some needs are so great that additional financial assistance is necessary. Many Greater Minnesota cities are facing costly upgrades to their water infrastructure, brought on by a mix of aging infrastructure and new regulations.

A recent report from Minnesota Management & Budget found that Ada, Minn., for instance, is facing $3.75 million in capital costs to bring its water system into compliance with current standards. For medium-sized Minnesota cities such as Austin and Hibbing, the price tag is more than $60 million.

Everyone deserves clean water, but it doesn't come cheap. Without additional resources, these costs will fall on residents and businesses, most of whom already are paying hefty utility bills.

The Legislature must pass a bonding bill — after failing to do so last year — that includes significant funding for water infrastructure.

The Legislature must also remove barriers to economic growth in Greater Minnesota. One of the biggest impediments right now is the workforce housing shortage.

A prime example is Digi-Key's recent announcement regarding a $200 million expansion that would create 1,000 jobs. The company would prefer to expand its Thief River Falls headquarters, but the struggle to attract workers—caused in large part due to a lack of middle-income housing—is a serious concern.

In order for rural communities and businesses to prosper, they must be able to seize opportunities for growth. One potential solution, and a project legislative priority, is to establish a workforce housing tax credit that would provide an incentive for businesses and individuals to invest in their own communities.

As the legislative session continues, we are looking to our Greater Minnesota legislators to be leaders on these vital issues. Economic growth and equity are achievable goals, and we are relying on committed lawmakers to help us reach them.

Carlson is the mayor of Alexandria and president of the Coalition of Greater Minnesota Cities. Goebel, the president and founder of Grit, a Delano-based company, is president of the Greater Minnesota Partnership, a network of businesses, chambers of commerce, economic development agencies, cities and nonprofits from throughout Greater Minnesota.

The Minnesota Rural Equity Project is a collaboration that aims to boost opportunity and growth throughout Greater Minnesota. It was launched earlier this year in St. Paul, and is a joint venture that includes the Coalition of Greater Minnesota Cities, the Greater Minnesota Partnership, the Minnesota Asset Building Coalition, and the policy research group Growth & Justice.

The project partners have identified a dozen legislative policy priorities, each with bipartisan and rural-metro support. The Herald invited the project leaders to describe some of those priorities, and this column is one of the results.