Mpls May Sue State During Shutdown Over $44M in Aid

The City of Minneapolis says that it has been allocated millions of dollars in state aid that doesn't require legislative action and should be paid regardless of whether a state government shutdown occurs; the city is now poised to sue the state if it doesn't receive the payments on time.

While many public and private organizations are bracing for a possible state government shutdown, which could occur Friday, the Minneapolis City Council has decided that it may go to court over state aid.

The Minneapolis City Council on Monday held a closed session, during which members voted unanimously to authorize legal action in an effort to require the state to make timely payments of local government aid (LGA) in the event of a shutdown.

When asked what indication the city has received that it wouldn't receive LGA in the event of a shutdown, spokesman Matt Laible provided the following statement: “Our understanding has been that, at the very least, the administrative function at the state that issues the payments would not continue under a shutdown.”

The state has already allocated a total of $87.5 million in LGA to the City of Minneapolis-with about $44 million due on July 26, the city said. The remaining half of the LGA is due on December 30.

Monday's vote authorizes the city attorney “to initiate or join in a legal action for the purpose of obtaining timely payments” of LGA if the government shuts down.

According to the city, LGA is “already appropriated under state law”-meaning lawmakers don't need to take legislative action prior to making the payments, and they should be made regardless of whether there's a government shutdown.

The decision stems from discussions between the League of Minnesota Cities, the Coalition of Greater Minnesota, and other cities throughout the state that rely on government aid to provide “essential public services,” the City of Minneapolis said in a news release. Mayor R.T. Rybak is expected to sign off on the authorization on Tuesday.

A state government shutdown will occur on Friday if Governor Mark Dayton and the Republican-controlled Legislature have not yet reached an agreement regarding funding levels for the next two years.

According to the City of Minneapolis' Web site, LGA goes into the city's general fund, which primarily pays for essential services like police, fire, 911, public works, and “many of the city's other core functions.” The city also pointed out that it generates a significant amount of sales- and property-tax revenue for the state-ultimately sending more money to the state than it gets in return in the form of LGA.