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Budget Cuts Effect Local Communities the Most.

If there’s one thing we learned on the Make Minnesota Thrive Drive last week, it was that Minnesota’s communities are bearing the brunt of Governor Tim Pawlenty’s reckless budget cuts. Minnesota 2020 has concluded the same thing, documenting how local governments have cut their budgets more than the state government during the Pawlenty administration. Their most recent report analyzes the changes in state and local government revenues from 2002 to 2009 with some pretty interesting results.

Based on the analysis from last summer, real per capita state revenue was projected to fall by 6.8 percent from FY 2003 to FY 2009.  However, this was before the collapse of the national economy and its deleterious impact on public revenue.  Based on the most recent Price of Government report, real per capita state revenue is projected to fall by 10.6 percent from FY 2003 to FY 2010 excluding federal recovery dollars.

However, this statistic in isolation overstates the decline in revenue to fund state government services.  State government dealt with its decline in revenue largely by cutting the dollars that it shares with local governments.  If we subtract the revenue that state government shares with local governments, the remaining state government revenue actually increased 1.5 percent in real per capita dollars from FY 2003 to FY 2010 excluding federal recovery dollars.As the graph indicates, the loss of revenue has not been evenly distributed among the different levels of government. The implications of these losses of revenue directly impact communities all over Minnesota. Real per pupil school revenue is projected to fall almost three percent, while city and county revenue are expected to fall 12 and 7.1 percent, respectively.

What we’ve seen on the Thrive Drive is that while stimulus programs are very welcome and appreciated. The bad news is that the overwhelming budget cuts dramatically lessen the impact of those programs like Cash for Clunkers and the American Recovery and Reinvestment Act. Check out how stimulus funds have benefited cities like White Bear and Bemidji on our Road Blog. You can also hear some real stories from Minnesotan citizens about how Governor Pawlenty’s irresponsible cuts have endangered the things they think make Minnesota so great.

Photo Credit: MN 2020

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