Did Rochester get its fair share from the state when it comes to local aid?
Dec. 11—Dear Answer Man: In (a recent) Sunday edition of the Post Bulletin, it states numbers of what the state of Minnesota reimburses some Minnesota cities for budget assistance. Compared to Minneapolis, St Paul and Duluth, Rochester's per resident amount from the state is only a small fraction of these other cities get. Can you further explain this? — Concerned taxpayer.
Dear Concerned,
Of course, I can explain it. Weren't you aware of my all-knowing status?
So, the money you're referring to is called local government aid. It's a sum of money the state gives to cities to help them fund the gap between what they need and what they can afford, particularly when it comes to infrastructure.
LGA — like its county-level counterpart, county program aid — is calculated on an eclectic mix of variables set by the Minnesota Legislature, and the total amount spread across the state is a not-insignificant amount. For 2024, the certified amount is $644,398,012. Of that pot of money, Rochester, with an estimated 2022 population of 121,878 will see $5,026,033. Other cities you mentioned — plus a couple Answer Man would like to highlight — include Minneapolis ($81,469,158), St. Paul ($81,648,670), Bloomington ($56,616), Duluth ($35,175,072), Woodbury ($0) and St. Cloud ($15,855,712).
According to that same population estimate from 2022, those cities have populations of 425,096 (Minneapolis), 303,176 (St. Paul), 87,797 (Bloomington), 86,619 (Duluth), 78,561 (Woodbury) and 69,568 (St. Cloud).
Doing the math here (divide by the population ... carry the "1"), we get per-resident totals of the following: Minneapolis ($191.65), St. Paul ($269.31), Rochester ($41.24), Bloomington ($0.64), Duluth ($447.74), Woodbury ($0) and St. Cloud ($227.92).
If you're outraged that Rochester gets a measly $41.24 per resident in LGA, you should be Flammin'-Hot-Cheetos furious on behalf of Woodbury, which gets a big, fat nothing. So, obviously, the population number has nothing to do with how much LGA a city might receive. So, what are the factors that determine how much state funding comes back to a city?
Well, according to the League of Minnesota Cities, the state determines a city's share of the LGA using a complex formula that compares a city's expenditure need to its ability to pay. Each city's expenditure need is measured based on several statistical variables that are used to try to identify characteristics that cause differences in the amount cities spend to provide the same level of service.
For cities with populations above 10,000 — which is the group above that we're talking about — those factors are the percent of housing built before 1940, the share of the tax base that is commercial-industrial, the percent population decline since the peak population level of the last 40 years, and the age index, which means the ratio of residents over age 65 compared to the total population.
My minions inform me that two main factors drive down Rochester's LGA total, though all four keep our state funding in check. Rochester's commercial-industrial tax base is fairly high, and the city also does not have a high percentage of houses built before 1940. In large part, that housing issue is tied to the fact that Rochester's population is always growing, with significant double-digit percentage growth rates nearly every decade since 1940.
By comparison, Duluth saw its population peak in 1960 at 107,312, and has seen the population slowly drop to 86,697 in the intervening 60 years, with nearly 14% being age 65 or older at the last census.
Compare that to Woodbury, which has seen its population nearly double from 1980 to 1990, then more than double — 131.4% increase — from 1990 to 2000. The city also has only 6.5% of residents age 65 or older. And with all those new people, that means almost entirely new — post-1940 — housing.
So, that's how the numbers are derived in a broad sense. And that's why Rochester's piece of the LGA pie is somewhat smaller per capita than other cities in Minnesota.
Mea culpa: Answer Man got two schools mixed up on page A3 of the Saturday, Dec. 9, 2023, Post Bulletin. Under a proposal to reallocate facilities, Hoover Elementary would become an early childhood facility. Churchill would become a full K-5 elementary.
Send questions to Answer Man at
.
