With State Cuts to LGA, Duluth Now Has $1.2 Million to Cut

By KBJR News 1

July 20, 2011 Updated Jul 20, 2011 at 10:34 PM CDT

DULUTH, MN (Northland's NewsCenter) - The City of Duluth will have to make another $1.2 million in cuts from this year's budget, after lawmakers in St. Paul decided to cut Local Government Aid up to 12 percent for Minnesota cities.

It is, however, a sigh of relief, as Duluth and other first-class cites avoided a phase-out of LGA, which Mayor Ness says could have devastated the city.

In the final state budget, Duluth lost a total of $4.7 million between LGA and market value homestead credits.

Knowing cuts were coming, city administration had built $1.5 million in cuts into the current budget and have since found another $2-million dollars in savings.

That's why the city only has another $1.2 million to make-up.

Mayor Ness says the cuts won't come easy.

"We're having discussions right now with staff to say, are there any other areas we can do, and unfortunately, especially when you're in the middle of the fiscal year it's often putting off capital projects or putting off equipment replacement that really needs to happen." said Ness.

Because the city will have another $4.7 million hole in its budget again next year, the general fund will likely have another reduction.

This year's general fund was roughly $74-million; only three years ago it was $81-million.

Posted to Web by Jena Pike