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Local government aid increase smaller than hoped, still welcomed by local cities

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CROOKSTON — The amount wasn't as high as some had hoped, but a $20 million increase to Minnesota's Local Government Aid program for 2017 survived the legislative session.

Proponents of the increase had pushed for $45.5 million, but the approved amount still will mean funding bumps for area cities. Crookston, which receives the highest amount of aid in Polk County, will see an increase of $116,000 for 2017, City Administrator Shannon Stassen said.

"We're very pleased to see that Local Government Aid was part of the package of the tax bill for this year's legislative session—it's critical to Crookston," he said.

Had the full proposed increase passed, the city would have seen a gain of $270,000.

LGA is disbursed based on a formula that takes into account population, average household size, peak population decline and the percentage of housing built before 1940. It can be used for any legal expenditure a city can make.

The Coalition of Greater Minnesota Cities had pushed for the $45.5 million increase, which would have brought the total amount of LGA dispersed to levels not seen since 2002, when cuts were made to balance the state's budget.

"We have to applaud the Senate for leading the charge for the funding increas," Robert Broeder, CGMC president and mayor of Le Sueur, said in a statement. "The road was much steeper in the House, but we are glad rural House members listened to their constituents and ultimately came around to supporting LGA as well."

Crookston relies on the aid for 66 percent of its General Fund revenue, which pays for city services such as police, fire protection and parks and recreation. Some of the funding also is set aside for economic development and other projects.

"Some of those things would simply cease to exist without LGA offsetting some of those costs," Stassen said.

In East Grand Forks, the funding accounts for about one-third of the city's revenue, but it didn't stand to gain nearly as much as Crookston with the increase—about $2,000 if the $45.5 million had passed.

This year, $3.6 million from the program was allocated to Crookston while $2.5 million went to East Grand Forks.

In total, about $519 million will be disbursed to Minnesota cities this year through the LGA program. The 2017 total will be $539 million.