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Skogen, Murdock visit communities

Area legislators were certainly not optimistic during meetings in the region Thursday and Friday.

One of the primary topics, of course, was money.

There were questions from the public about how to not spend it...and how to make cuts to budgets that have already been formulated by Minnesota cities and the state itself.

State Sen. Dan Skogen, DFL-Hewitt, and Representative-elect Mark Murdock, Republican-Perham, held a half-dozen public discussions Thursday in District 10-B, then Skogen and Rep. Bud Nornes, Republican-Fergus Falls, followed the next day with sessions in District 10-A.

Murdock, elected in November to succeed Dean Simpson in the eastern part of Otter Tail County, will be jumping into his first legislative session in early January. Skogen is at the midpoint of his first term in the Senate.

As it turned out, topics and related discussions took distinct shifts because the release of news about potential budget cuts was not released at St. Paul until early afternoon Friday. Thus, speculation the first day became reality the second.

Murdock and Skogen swung through Menahga, Sebeka, Wadena, Parkers Prairie, Henning and Perham. Several constituents asked them about school funding - how the state formula might be revised - and put forth queries about how much Local Government Aid (LGA) might disappear when Gov. Tim Pawlenty cranked up his calculator.

On Friday, the stops were in Battle Lake, Dalton, Underwood, Fergus Falls, Pelican Rapids and Vergas, although Nornes, representing House District 10-A, only made the first two stops.

LGA cuts faced by area cities

About half-way through Friday's circuit, word emerged from the state capitol that some area cities would take a hit on the amount of LGAs they would receive as part of their Dec. 26 payments, which actually was funding that had been earmarked for local budgets for the last half of 2008.

Moreover, most cities had set new budgets required by statute as they looked ahead. Now revising their budgets becomes a large task, it was stressed.

The paring of LGAs was done by the governor by what is termed "unallotment," because the amounts had previously been set. But that was prior to a budgetary analysis that indicated about $500 million would have to be immediately cut, then another slashing of approximately $4.7 billion would occur regarding the coming biennium.

The governor subsequently announced that Perham will lose approximately $64,287, Frazee will be cut by $25,538 (of an original amount certified at $184,025), Detroit Lakes will be cut by $142,581, and Vergas will not lose any of a total set earlier at approximately $13,000.

Small towns exempt from $100 million cut

The reason for the latter resolution was because Pawlenty exempted cities of less than 1,000 population and counties with fewer than 5,000 persons. The small counties include Traverse, Kittson, Lake of the Woods and Red Lake.

The amount "taken" from cities and counties amounts to $110 million as it applies to remaining 2008 payments. In many cases, the cuts amounted to approximately 4-5 percent of the total earlier certified as LGAs. Preliminary estimates of the trimming had been all the way to 30 percent or more.

But the cuts for the coming biennium may have to be massive for the larger deficit that is faced, which is about 90 percent of the total deficit, Skogen and Murdock agreed.

"It will be difficult, but we will get through it," Skogen said. "These problems are real, and the numbers to recovery are huge."

The elected officials noted that a tentative budget for the state will be available in mid-January, with dollar amounts forecast in February. Then the heavy lifting starts.

Education, other topics on horizon

Skogen said several topics are facing big cuts in 2009. For example, it is expected that education's goal - according to some state sources - will be targeted at 13.3 percent. He said that figure can't be met without hurting schools severely.

At the same time, he told a Perham audience that was quite small, "Money (alone) doesn't fix the problem."

His reply was to queries of concern saying per-pupil funding is unequal from one district to another.

The idea that lake home property is not taxed the same as other properties was also an issue advanced.

In any event, he affirmed, "Education is going to be on the table."

The legislators said meetings have come up with "think tank" ideas such as shared transportation systems, centralized food services and perhaps going to a county superintendent system for schools "in an attempt to trim administrative expenses."

It is expected that open enrollment will receive scrutiny, as well. It is possible that not all of the funding "tied" to a student, so to speak, would follow him to his new school when transferring.

"Some of it would stay in Perham," Skogen pointed out.

Sales tax on food, clothing?

Another controversial area discussed at Perham was the possible collection of sales tax on food and clothing.

Still, it was noted that such a measure would not make a large dent in the budget deficit over two years. Currently, Minnesota has remained solid in not applying sales tax to those areas, while North Dakota has a tax on clothing. A few states - Colorado for one - have a tax on some foods.

It was speculated that by bargaining to get sales tax on one or the other, that perhaps the overall tax rate of 6.5 percent could (maybe) drop to 5 percent.