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State aid to cities up

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state Perham, 56573
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.

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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.

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