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Coalition of Greater Minnesota Cities warns of funding gaps after 2026 session, urges follow-up in Cannon Falls
Summary
At the July 21 Cannon Falls City Council meeting, Darren Lee of the Coalition of Greater Minnesota Cities summarized the 2026 legislative session, highlighting a $6 billion February forecast, a $1.24 billion bonding package, and that only $15,000,000 was allocated this year for lead-service-line replacement — far short of needs.
Darren Lee, an attorney with Flaherty & Hood representing the Coalition of Greater Minnesota Cities, told the Cannon Falls City Council on July 21 that the recently completed legislative session produced mixed results for Greater Minnesota cities.
Lee said the February 2025 forecast showed an approximately $6,000,000,000 budget gap that constrained lawmakers’ options, though revenue changes before adjournment improved the out-year picture. He said the session produced a roughly $1,240,000,000 bonding package plus more than $400 million for the Public Facilities Authority, including some money for roads and bridges but far fewer local project earmarks than development interests sought.
Lee warned that the narrow partisan balance in the legislature makes future budget and tax discussions unpredictable and urged local officials to keep advocating for stable Local Government Aid. “In 2025 the Senate Democrats proposed cuts to LGA,” Lee said, “and we were there working with the House to say no.” He credited local advocacy for defeating those cuts this session but said the coalition will continue monitoring projections that could revive pressure on LGA.
On lead service-line replacement, Lee said the coalition requested substantially more funding than lawmakers provided. He said states initially allocated hundreds of millions for replacement and that the Environmental Protection Agency requires all lead service lines be replaced by 2037. “We were asking for $250 million; this year we only were able to obtain $15,000,000,” Lee said, calling the allocation insufficient to meet the statewide need and urging pursuit of additional funding sources.
Lee also summarized recurring housing bills that would limit local zoning authority — measures labeled over the past three years as "missing middle," "yes to homes," and the 2026 "starter home" proposals. He said many of those measures did not pass this year, but cautioned that state preemption attempts remain a recurring issue for smaller cities.
The presentation concluded with an invitation to council members to participate in coalition events and to contact coalition staff for follow-up; Lee left informational packets and a session report for city staff. The council did not take formal action on the policy topics during the meeting.
Next steps: Council members and staff may contact the Coalition of Greater Minnesota Cities for the session report and for advocacy coordination; the coalition’s materials provided contact information for follow-up.
