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City manager warns Senate tax bill provision would cut Mankato aid by $263,880 and eliminate shared cannabis revenue
Summary
City Manager Susan Arns told the council a Senate omnibus tax-bill provision would reduce local government aid to Mankato by $263,880 and that a separate proposal would stop the state's share-back of cannabis surtax revenue to cities and counties.
City Manager Susan Arns briefed the council on provisions in a Senate omnibus tax bill under committee consideration that she said would reduce local government aid (LGA) to the city by an estimated $263,880 if adopted and would eliminate the 20% share-back of a 10% cannabis retail surtax to cities and counties.
Arns put the potential LGA reduction in concrete terms for council members: she said $263,880 is roughly "12% of the salaries for public works," would cover all airport salaries, and equals the cost of "2 full time police officers" and "2 full time firefighters." She said the number also exceeds the city's liability-insurance premiums and equates to "a 1.1% tax increase" for residents if the city had to replace the funds via property tax.
On cannabis revenue, Arns reminded the council that 2023 state legislation imposed a 10% cannabis retail surtax, with the Senate bill under consideration removing the intended 20% distribution to cities and counties and instead leaving the full surtax to the state. Arns said the city had set some fee expectations based on the prior revenue-share assumption and expressed concern about the budgetary implications if that sharing were eliminated.
Arns said she had discussed the impacts with state legislators and that staff would continue to monitor the bill and update council members. No council action was taken; Arns asked for council awareness as the bill proceeds through legislative deadlines and hearings.
