Cities flying Minnesota’s outdated state flag would pay a steep price for it under a new bill proposed at the Legislature.

Some cities, though, would find it more costly than others. 

The new flag, selected by a commission after an exhaustive public meeting, comment and submission period, came in response to long-standing criticisms of the 1983 design’s depiction of Native Americans. Whether to fly the new flag or revert to the old one has become something of a recent political litmus test for city councils, despite the new flag being nearly two years old. 

Related: Did Minnesota change its state flag without public input?

While the councils rejecting the official flag represent communities in the the Twin Cities suburbs and Greater Minnesota, the bill would mostly only hurt the latter. Twin Cities suburbs would skate by, and the reason has everything to do with the state’s formula for distributing money across property tax poor cities to help them cover their expenses — otherwise known as local government aid (LGA).

A brief look at how LGA works

The bill, introduced by DFLers at the Legislature, proposes a 10% cut to local government aid, or LGA, for cities flying the outdated state flag. (Counties that use the old flag would lose state aid, too, though few are reportedly doing so).

The bill is likely going nowhere this session, but that doesn’t mean a future Legislature wouldn’t rekindle it if control of the bodies changes.

For context, LGA funding is a huge deal for cities, said Bradley Peterson, executive director of the Coalition of Greater Minnesota Cities. It is set up to be a great stabilizer, using a complicated rubric to stabilize local government budgets. 

“With less LGA or with no LGA, a lot of cities would be forced to either drastically increase their property tax levies or significantly decrease costs,” Peterson said.

Yes, those things happened anyway in Minnesota cities and counties this year, but without LGA it’d likely be even worse. 

That’s why local government organizations lobby to protect LGA or update the formula to get more of it. The Coalition of Greater Minnesota Cities, for example, placed LGA among its top focus areas before this legislative session.

The LGA formula factors in numerous considerations to determine award amounts each year, including a city’s population, expenses and property tax revenue. New housing, population shifts and average ages are considerations as well.

Boiled down, the formula compares a city’s needs to its tax base’s ability to meet those needs:

• Low needs + high tax base = lower LGA
• High needs + low tax base = higher LGA

How much LGA do cities get?

Many Greater Minnesota cities rely on LGA because of their high need, low tax base combinations. 

“For a lot of cities, especially in Greater Minnesota, 20%, 30%, 40% of their general fund is covered by local government aid,” Peterson said. “So it is pretty significant.”

All together, the state awarded more than $644 million in LGA in 2026, according to the Department of Revenue. About two-thirds of it is going to Greater Minnesota cities.

Those cities include a growing number in Greater Minnesota opting to use the old flag design. Here’s how much LGA a sampling of them receive from most to least: 

• Wadena: $2,141,915
• North Branch: $1,032,838
• Plainview: $974,659
• Janesville: $963,324
• Zumbrota: $823,604
• Pine Island: $745,108
• St. Francis: $648,144
• Babbitt: $531,472
• Elk River: $48,616

As the numbers show, the cost of taking a stand would be more painful in Wadena than Elk River. Knocking 10% off the totals, as the bill would do if passed, would wipe a whopping $214,192 from Wadena’s budget and only $4,862 from Elk River’s. 

Related: Unveiled in 2024, Minnesota’s state flag is flying more proudly today

The cost goes down to nothing, however, in other cities. Why? Some cities receive no LGA.

Which cities don’t get LGA? 

Most Twin Cities suburbs fall in the category of cities not qualifying for LGA due to their tax bases covering their needs. 

That means the following cities with councils that voted to use the old state flag stand to lose no LGA for their decision:

• Champlin
• Columbus 
• Ham Lake
• Inver Grove Heights

Generally, Greater Minnesota communities are more likely to get LGA. But there are exceptions, including cities with large industrial bases or high-value lakeshore properties, Peterson said.

Crosslake fits the lakeshore communities description. It is the exception so far in Greater Minnesota in opting for the old flag while receiving no LGA.

The post Democrats want to take money from cities that fly the old state flag. Here’s how much appeared first on MinnPost.

This post was shared from MinnPost.