State vs City

I wanted to just mention a few points that I will be writing about in greater depth in the future. The state deficit has impacted just about everyone and it has been devastating to a lot of cities and taken a big bite out of Isanti. What adds insult to injury is the State Government (Governor and Legislature), central theme that we are going to slash funds we promised to cities to balance our budget but hey we will let cities jack up your taxes to make up for it. So the State will not take the heat for raising taxes but will benefit from it as many essential services will continue to be performed by local government.

I call this the 2010 Local Anti-incumbent Act - The State is forcing local governments to raise taxes to make up the difference. Local leaders will face tough choices as they once again have their funds raided to balance the state budget. Cities are the State's rainy day fund. Many local leaders will face the wrath of their voters who will be angry by reduced services or higher taxes.

Isanti will not need to raise taxes because we have exercised fiscal discipline the last few years and through a great deal of hard work we are prepared. Isanti already buys off of state purchasing list and we are reaching out to our neighboring communities to find even more ways to save money. I will be announcing three significant items that will be helping the City at Tuesday's Council meeting.

We face many tough choices and will be hurt by the State's failure. The State however is showing its true colors, one example..... We all get the homestead credit for the home we live in. It is a great deal to be able to pay lower property taxes on our homes. The State has created this benefit and claims credit for it.

This is how it works. Homeowner pays less taxes due to the homestead credit and the local units of government get less money and the State sends a check to the local units of government for the difference. The problem starts when the State does not make its payment to the local units of government. A city gets less tax revenue and either cuts services or raises taxes to make up the difference. The State gets to claim credit for a popular tax break without actually paying the full cost. The State has talked about reducing unfunded mandates.... well this is a whopper they just created by cutting this reimbursement to hundreds of cities....

Last point - The Govenor's proposed budget balanced a nearly $5 Billion deficit when it appears that it will grow to $6 Billion to $8 Billion meaning the cuts will grow....