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CGMC leaders: Now is the time to invest key priorities that will bolster Greater Minnesota

Local Government Aid, water infrastructure, child care and housing among coalition's top legislative priorities for 2022

As lawmakers plan for how to utilize the state’s historic $7.7 billion budget surplus, leaders from the Coalition of Greater Minnesota Cities (CGMC) are calling on Governor Walz and the Legislature to remember rural Minnesota.
“The Governor and legislators have a once-in-a-generation opportunity to make investments that will benefit our state now and well into the future,” said CGMC director Bradley Peterson during a virtual meeting with statewide leaders and media Jan. 27.
Peterson, who was joined on the call by Luverne Mayor and CGMC President Pat Baustian and Owatonna Mayor Tom Kuntz, said for Greater Minnesota that means investing in Local Government Aid (LGA), wastewater and drinking water infrastructure, and in workforce needs like child care and housing.
LGA hasn’t kept up with rising expenses, inflation
As its top legislative priority for 2022, the CGMC is seeking a $90 million increase in LGA, a statewide program that restrains property taxes, reduces inequities between communities and ensures all cities are able to provide quality services and quality-of-life amenities to residents and businesses.
“LGA is the lifeline for Greater Minnesota cities. Without it, rural Minnesota would crumble,” Baustian said.
He noted that in Luverne, LGA makes up about 28 percent of the city’s annual budget. He said Greater Minnesota cities are strategic when planning their budgets, but increasing expenses and inflation continue to put a strain on city finances.
“Like other cities, our costs have increased a lot in recent years,” Baustian said.
“Construction costs have gone up 35 to 50 percent over the last four years. We have an aging workforce, which drives up costs. But LGA has not kept pace with rising costs and inflation.”
Peterson added that while local governments received pandemic relief from the federal government, that money is not a substitute for LGA.
“LGA is consistent funding with flexible uses that allows cities to better plan for the future as they set their budgets.”
Water infrastructure should be cornerstone of bonding bill
CGMC is also urging the Legislature to pass a large capital investment bill (a.k.a. “bonding bill”) that includes $299 million for water and wastewater infrastructure grant and loan programs.
“With low interest rates, a hefty budget surplus and federal money to leverage, now is the time for a transformational investment in Minnesota’s water infrastructure,” Peterson said.
“This funding is needed to make progress in addressing the backlog of water infrastructure projects across the state.”
Peterson noted that costs to upgrade or build a new water treatment facility are often tens of the millions of dollars which mostly fall on communities and their ratepayers.
“Cities are willing to pay their fair share, but it is incredibly difficult to pay for these massive projects without a grant or loan from the state,” Peterson said.
Child care, housing play major role in addressing workforce shortage
The CGMC is also calling for state investments in programs that address child care and housing shortages that have long hindered economic growth in Greater Minnesota.
“In Greater Minnesota, businesses of all sizes are scrambling to fill open positions,” said Peterson. 
“Simply put, employers can’t get workers if there is nowhere for them to live and no one to look after their children while they are at work.”
Baustian said child care is the No. 1 economic development priority in Luverne, a sentiment shared by many community leaders across Greater Minnesota.
“When we talk to our local businesses, all we hear is ‘What are you going to do about child care?’” Baustian said.
According to First Children’s Finance, Greater Minnesota needs to add 40,000 new child care slots to keep up with demand.
Unlike in the metro area, Greater Minnesota communities rely heavily on in-home providers, many of whom have chosen to leave the profession in recent years.
Some cities have decided to purchase buildings for city-owned child care centers, and Baustian shared information about Luverne’s recent move to do that with the former Total Card Inc. building.
This session, CGMC is requesting $20 million for a child care capital grant program, which provides grants of up to $500,000 to outstate communities to fund up to 50 percent of the costs to build, upgrade or expand child care facilities.
In addition, CGMC is seeking $5 million for the DEED child care grant program, which has proven successful at helping to create new and retain existing child care providers.
The shortage of housing, particularly market-rate housing for middle-income families and workers, is also a major concern across Greater Minnesota.
“In rural Minnesota, there aren’t enough developers that have the cash and are willing to build in our communities,” Baustian said.
“We are also dealing with the issue of aging housing stock. When housing is already hard to come by, it is critical we are able to preserve and maintain the existing homes in our community.”
CGMC is pursuing several legislative proposals to encourage construction and increase availability of housing across Greater Minnesota.
Proposals include
•the creation of a new “fix up fund” grant program to help cities rehabilitate dilapidated homes.
•state funding for public infrastructure, such as sewer connections and streets, needed for new housing developments.
•additional funding for the existing Workforce Development Grant Program.

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