fedgazette

Letter to the Editor

Re: Government Spending

Published March 1, 2004  |  March 2004 issue

Re: Government Spending

To the Editor:
Regarding your article ("After the fiscal gold rush," January 2004 fedgazette) on state spending, Ronald Wirtz stated: "Minnesota State Auditor Pat Awada released a report last February that recommended a 42 percent decrease in local government aid to cities. State lawmakers settled on cuts of 3.5 percent for 2004 and 5.7 percent in 2005."

You are comparing apples and oranges. The auditor proposed a 42 percent cut in the appropriation for local government aid for cities over 2,500 population. The reductions you cite (3.5 percent and 5.7 percent) are the aid cuts as a percent of total city revenues. The local government aid program funding was permanently reduced by about 25 percent ($586 million to $437 million), and an annual inflationary increase was eliminated as well. An additional $20 million was cut for two years from a credit reimbursement program.

Eric Willette
Policy Research Manager
League of Minnesota Cities
St. Paul, Minn.

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