Mark Dayton

Gov. Mark Dayton’s budget proposal on Tuesday would preserve local government aid funding to Minnesota communities – something Scott Huizenga, East Grand Forks’ city administrator, said is “very good news.”

But “there’s still a long way to go in this session,” he pointed out, and a lot could change before the next two-year budget, which starts July 1, is finalized by Minnesota lawmakers.

“I honestly stopped trying to speculate where it’s going to end up,” Huizenga said. “This is certainly goods news so far that we have a starting point that keeps LGA at least constant. And no one was really anticipating any large increases, of course. Just the fact that we can hold steady is good news.”

LGA funding mostly goes to greater Minnesota cities and was designed to help smaller communities that don’t have large property tax bases.

Huizenga said it accounts for nearly 30 percent of East Grand Forks’ revenue, but it’s been “kind of slowly dwindling away” in recent years. The city’s total budget for 2011 is about $8.2 million, with $2.2 million budgeted to come from LGA – the amount the city received in 2010.

East Grand Forks has lost just over $1 million in LGA funding that the state had scheduled to pay since December 2008 as Minnesota lawmakers and former Gov. Tim Pawlenty cut the funding to deal with budget deficits.

I’m working on a story this afternoon about how northwestern Minnesota officials and lawmakers are responding to the budget and if they think LGA cuts are off the table for this budget session. Here’s part of an article about Dayton’s budget by Forum Communication’s Capitol Bureau writer Don Davis:

ST. PAUL – Gov. Mark Dayton wants to preserve state aid to local communities while raising taxes on the richest Minnesotans and increasing education spending in a budget proposal he released this morning.

The Democrat’s total budget plan for the next two years would be $37 billion, up from just over $30 billion in the budget that ends June 30. At the same time, he makes cuts to help balance a $6.2 billion budget deficit.

There were few surprises, since he talked extensively about the budget during a year he campaigned for governor. Republicans already have said they would limit spending to $32 billion and said his plan to increase taxes on the rich a non-starter.

Dayton would pay for his increased spending in part by increasing taxes on what he considers wealthy Minnesotans to 10.95 percent. It would apply to joint filers earning more than $150,000.

He also would apply a 3 percent surcharge on those earning more than $500,000.

“It makes Minnesota’s tax fairer by raising taxes only, only on the wealthiest 5.5 percent of Minnesota taxpayers,” Dayton said this morning in unveiling the budget plan.