Cuts to state aid force cities to rely more on property taxes

Minnesota's State Auditor says cities are relying more on property taxes to pay their bills. The 2008 city finances report found that revenues derived from property taxes grew 102 percent between 1999 and 2008.

The report says state and federal aid grew by only ten percent.

State Auditor Rebecca Otto, a Democrat, said cities cannot handle any more cuts in state and federal aid. She said she will encourage the Legislature and Gov. Pawlenty to keep local government aid at current levels.

"Somebody has to fund the services and if the state chooses not to help fund those services, it will end up on property taxes. And the question is: 'is that good policy?' Can Minnesota families live with that?" Otto said.

Governor Pawlenty has said cities, like other units of government, need to deal with smaller budgets in a difficult economy.

Pawlenty has unilaterally cut $410 million in aid to cities and counties since December, 2008. Aid to local governments could be a budget-cutting target again since Minnesota is facing a $1.2 billion deficit.