As it trims license fees, East Grand Forks begins to worry about coronavirus’ budget hit

East Grand Forks City Hall
East Grand Forks City Hall. File photo Brandi Jewett/ Grand Forks Herald

East Grand Forks is set to reduce license fees for businesses there amid the outbreak of coronavirus that’s gouged the U.S. economy.

City Council members Tuesday unanimously agreed to reduce by 25% the cost of licenses for businesses that weren’t able to bring in money via that license during the pandemic, including massage businesses and on-sale liquor establishments. Those businesses will pay the lower fee when they apply for a new license.

It’s a largely symbolic move on the city’s part: an on-sale license costs $4,000 annually, but the others cost $150 or less. The city, which set an $11.5 million budget for 2020, brings in about $60,000 from those fees in 2019 -- reducing that figure by 25% yields $45,000. Mayor Steve Gander last week said the reduction was a “good-faith gesture.”

Council members approved the reduction quickly and without much fanfare, but there were some faint rumblings about other parts of the city’s budget as the pandemic continues to take its financial toll.

Council members also unanimously OK'd a $297,000 request from East Grand Forks’ public works department to buy a new loader and other road equipment, and City Council member Dale Helms said a resident in his ward was worried about spending that money as Minnesota’s government faces a massive budget hole.


A few hours before the council meeting, staff at Minnesota’s Management and Budget Office announced that the state is facing a projected $2.4 billion budget deficit for the remainder of the current biennium, which is set to end in June 2021. It’s a massive change from February, when state administrators predicted a $1.5 billion surplus.

“Is this going to affect when this deficit hits?” Helms asked of the loader and truck purchase.

City Administrator David Murphy said the purchase wouldn’t affect aid East Grand Forks receives from the state. Money the city sets aside for large-scale purchases like the loader could fill holes elsewhere in the budget.

“However, it would be something that we don’t normally do, or we haven’t done,” Murphy told council members. City leaders could use that “capital” money in an emergency, but Murphy told the Herald that East Grand Forks is far from that point. The city has steadily built a large surplus over the past several years.

And council member Tim Riopelle urged city administrators to begin working on East Grand Forks’ 2021 budget. City staff typically start doing that once they hear the results of an audit in May, but Murphy said logistical hurdles presented by the virus have pushed that to the end of the month.

“I think we’re going to have to see (a) pretty deep cut, 10-15% possibly, from what I’m seeing from all the state information,” Riopelle said. “I want them to start preparing for that because it’s going to be a little deeper than we’ve cut before.”

Joe Bowen is an award-winning reporter at the Duluth News Tribune. He covers schools and education across the Northland.

You can reach him at:
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