How could immigration reform fit into the growing worries about Minnesota’s state budget deficit’s impact on cities and counties?

Austin Mayor Tom Stiehm made it fit last Wednesday, when he held his State of the City address.

The mayor’s words made everyone take notice.

First, it must have been an important meeting, because nearly everybody who was anybody was there.

The State of the City address drew a crowd, who peppered the mayor with questions.

Also, listening to Stiehm were other city officials, former mayors and Mower County officials and staff.

The city is between a rock and a hard place and Mower County is moving in. The reason: deep cuts to Local Government Aid and County Aid Program monies government units have become dependent upon spending for programs and services to taxpayers.

Gov. Tim Pawlenty has proposed slashing LGA to cities and County Aid Program monies to counties in order to straighten out a state budget deficit estimated between $5 and $8 billion.

Doing that won’t come easy. Not if local government has anything to say about it.

Already, the League of Minnesota Cities has balked at the prospect of LGA cuts, saying it will be the ruination of the current level of city programs and services in Greater Minnesota.

Mayor Stiehm said the city expected $7.8 million in LGA this year.

Without it, Stiehm predicted the city will have to raise taxes from 32 to 102 percent to make up the difference.

After slashing the workforce from 185 to 141 full-time workers over a 20-year period, the city finds it self between the proverbial rock and hard place.

The only recourse if the LGA cuts are made is to reduce city services and lay off city employees.

That’s also the prospect faced by Mower County.

County woes

After the governor’s budget address a week ago, county coordinator Craig Oscarson, also an intent spectator at the mayor’s address, crunched some numbers.

The county coordinator didn’t like what he saw.

“In my career, it’s the worst I’ve ever seen,” Oscarson said of what looms ahead for Mower County to deal with double-digit cuts in already sour economic times for local government.

In one scenario, the governor’s proposed cuts to the Department of Human Services alone would cost Mower County $275,000 the first year and $504,000 the next.

By another scenario, they would cost Mower County initially $500,000 and between $725,000 and $800,000 in the next year of the biennium.

If the cuts occur, counties will be forced to do unpopular things, according to Oscarson — possibly at risk to DHS clients.

“For instance, curtailing medical assistance by delaying delivery of those services,” he suggested. “Human Services has already suffered severe cuts in the last couple of years.”

Oscarson and finance director Donna Welsh are, like their city counterparts are their own, poring over the county budget, trying to stay ahead of what is to come from the state.

“We can’t put our heads in the sand and hope it’s going to go away by itself,” Oscarson said of any delay in dealing with the financial crisis.

Stalling may force Mower County to consider layoffs of workers or a reduction of services or both, according to the county coordinator.

The key, Oscarson said, is to determine “Where can the public live with less?”

Thus, every decision to be made by the county board is receiving close scrutinizing from Oscarson and Welsh and the commissioners themselves before a vote of approval or disapproval is taken.

Last week, long-time Mower County Highway Department employee Ed Wolf announced his retirement.

The county didn’t automatically announce it would replace the truck driver and heavy equipment operator and tabled a decision on filling the vacancy in the high way department.

Even little things could cause larger financial problems ahead.

That’s why Gabrielson thinks Mower County’s financial picture is cloudier than the city’s. “More treacherous,” he described it.

Of course, there’s another reason he is feeling the state budget deficit tension — having a $36 million new Mower County Jail and Justice Center project does that to an elected official.

However, he has a target picked out for accepting some of the build-a-new-jail blame.

“I would agree, in part, that it is more treacherous right now for the county because the Minnesota Department of Corrections is literally forcing Mower County and other counties to do things,” he said.

The commissioners’ apparent point being: the DOC forces Minnesota counties to build jails and treat prisoners in ways that are more expensive than Iowa and other states.

The county’s jail and justice center project came up at the State of the City address.

The mayor observed that Mower County jail prisoners don’t like to be boarded out to Osage, Iowa, where they are housed in the Mitchell County Jail because of no room at the Mower County Jail.

The reason?

“They don’t get the nice meals, health care, recreation areas like they do in Minnesota,” Gabrielson said. “This is the Department of Corrections’ fault for having its way in the state of Minnesota. Nobody seems to be overlooking the rules they’re (the DOC) making and counties are paying for it dearly.”

Gabrielson was referring to the DOC’s rules, forcing the current Mower County Jail to become only a 90-day lockup, while at the same time sending short-term offenders from the state’s prisons back to the county to serve out their sentences.

That, in large part, is the reason Mower County is building a two-story, 124-bed jail on two blocks of city-acquired property in downtown Austin.

At $36 million, it will be the largest capital improvement project in the history of Mower County.

Little money was set aside for the project, so the bulk will come from selling bonds, which have to be repaid by the county, which will be done by raising property taxes — this year by 17 percent.

According to Gabrielson, nobody wants to raise taxes in any times or the current tough economic times.

However, Gabrielson said the tough economic times may work for the county when taking bids on the new jail and justice center project.

“Right now, construction businesses are looking for jobs,” he said. “Building projects are down, the things needed to build the jail and justice center, have seen their prices fall. Freight costs are down. Everything is down right now and the economy is down, too.

“If we delay it — and it’s already about 45 percent higher than it should have been originally — I’m afraid that to wait another six months or a year, inflation will drive up the costs another six percent or more. If we wait two years, it will be 15 percent more,” he said. “On the other side of the coin, if this economy all of a sudden starts getting better, all those prices are going to start shooting up again.”

Gorilla war

While Mower County grapples with two 500-pound financial gorillas in the form of dealing with the state budget deficit’s impact and the jail and justice center project, the city of Austin also has a gorilla-sized problem that could have an economic impact: immigration.

During his State of the City address, the mayor said, “We will no longer accept the inaction of our federal government on immigration.

“We are in the eye of the hurricane on this issue and are being ignored. This is no longer acceptable,” the mayor said.

Stiehm advertised his meeting would focus on the 13 percent LGA cuts expected by the city as well as immigration issues.

Austin Third Ward Council Member Marian Clennon listened to the address.

Solving both comes with a steep price tag Austin cannot afford by itself, she said.

“I think there’s a dollars-and-cents component to the immigration issue, too, and that’s to enforce the laws and what that will cost,” Clennon said. “If we use our people, it’s going to cost our taxpayers’ money.

“Since it’s a federal issue we feel they should use their money,” she added.

The Austin City Council is already looking over where cuts can be made to city spending and it will continue to do so, Clennon said.

“We’ve started with a few things,” she said of the city officials’ examination of spending. “Some of the departments still have to give us their recommendations on what could be cut if necessary.

“We haven’t seen the whole picture, but we’ve talked about the issues already that needed addressing right away,” Clennon said.