Small cities benefit from legislative funding increases

By Anna Jauhola
Over recent weeks, small cities across Minnesota have been busy creating budgets for 2024. They have until the end of September to set final budgets.
Both Hallock and Lancaster city councils have been working on their budgets, and received good news from this legislative session. Small cities with populations under 5,000 received increased funding and some new money. According to the Minnesota Association of Small Cities, the Legislature appropriated nearly $20 million in local government aid, nearly $30 million in one-time public safety dollars and $16 million for local road improvement money – all for small cities.
In a recent meeting, the Lancaster City Council was able to update the city’s fire siren, which had been on the fritz. They received $15,797 in public safety aid, which can only be used on issues affecting public safety, like replacing the fire siren. This amount significantly reduced the city’s cost for the project, making it more palatable to use city and fire funds to pick up the final cost.
This Public Safety Aid money is available for the cities this year, to be paid by Dec. 26, 2023.
All cities in the county received the following for Public Safety Aid: Donaldson, $1,500; Hallock, $39,033; Halma, $2,494; Humboldt, $1,750; Karlstad, $30,588; Kennedy, $7,570; Lake Bronson, $7,658; St. Vincent, $2,451.
Local Government Aid, or LGA, is a major part of every small city’s budget, usually a determining factor in the amount a council sets for its annual tax levy. This year, most cities in the county received an increase in its LGA, which will be an ongoing increase, according to the Minnesota Association of Small Cities.
According to the Minnesota Department of Revenue, “The formula calculates each city’s aid based on data variables such as population, housing stock, and property tax base. The Minnesota Department of Revenue certifies LGA for cities based on current statutes, including any changes enacted during the most recent legislative session, by Aug. 1 each year.”
Hallock’s LGA increased by $15,764 to raise its total aid to $426,354.
Halma received $1,566 extra in LGA, raising its total to $15,259.
Humboldt received $340 more for a total of $12,500 in LGA.
Karlstad’s LGA increased by $16,690, for a total in 2024 of $311,910.
Kennedy’s LGA went up by $4,793, for total aid amounting to $64,014.
Lake Bronson received $2,850 more in LGA, for a total of $79,014 of local government aid in 2024.
Lancaster’s LGA increased by $14,322, for a total of $114,341 in 2024.
St. Vincent received $701 more in LGA, and will now work with $18,028 in 2024.
Donaldson was the only city in the county where LGA decreased by $200, for total LGA in 2024 of $4,301.
Finally, the Legislature approved ongoing Small Cities Assistance, which was started in 2015 and supposed to have been funded through gas tax. This new funding is coming from taxes on auto parts and licenses, and is dedicated for use on streets.
The city of Hallock has been working on a capital improvement plan, highly focused on street repairs over the last year or so. A construction crew recently completed several repairs in chronically terrible areas. The city of Hallock’s chunk of street funding for 2024 is $34,013. This is a good amount to add to the street budget. Last year, the council budgeted for $75,000 in the street fund and have discussed increasing that for 2024.
Other cities in the county received funding as well for streets: Donaldson, $13,545; Halma, $11,468; Humboldt, $12,481; Karlstad, $23,710; Kennedy, $16,788; Lake Bronson, $15,497; Lancaster, $17,558; St. Vincent, $15,003.