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State aid to cities up

state Perham,Minnesota 56573
Perham Focus
State aid to cities up
Perham Minnesota 222 2nd Avenue SE 56573

City officials all over Minnesota are analyzing the outcome of the just-concluded legislative session.

On the surface, cities appeared to have fared well under the 2008 legislature--at least with regard to the Local Government Aid program.

Cities will get $42 million more in LGA under the bill. Counties, meanwhile, will get $22 million more.

For cities, the final bill could bring another 2 percent into municipal coffers in 2010; and another 4 percent in 2011, according to Kelcey Klemm, Perham city manager.

In Perham, it means $552,602 in aid for 2009--compared to $534,009 for the current year, 2008.

"The worst case scenario would have been a cut in LGA, and a reduction to cities," said Klemm.

JOBZ, an economic development and jobs-creation program that has been aggressively deployed in Perham, was retained--but not extended.

Closely scrutinized by legislators, with rural lawmakers generally supporting it, JOBZ was at high risk of being altered substantially--or even gutted.

The 2008 legislature retained JOBZ incentives to year 2015. However, Perham officials hoped the years would be extended. As it stands now, a potential developer would only realize five to six years of JOBZ incentive. When the program was enacted in 2005, those businesses who were on board early realized a decade worth of tax breaks.