Chamber of Commerce and City Council members butted heads last night in a heated discussion over state and city money issues.

The two entities met at the annual City Council Retreat to talk about goals for 2011, but the conversation eventually turned to Local Government Aid – a hot topic between the two groups. The Chamber has not come out as publicly supporting the state funding that accounts for more than 50 percent of Austin’s city budget. Some council members are especially upset about the Chamber’s apparent lack of support because the Albert Lea Chamber of Commerce recently passed a resolution in support of LGA.

Past Chamber president Tom Sherman said the Chamber has not come out explicitly in opposition to LGA, and the Chamber’s lack of commitment to choosing a side does not mean local members are adamantly opposed to it either.

“Nobody in the Chamber of Commerce is opposed to LGA,” Sherman said. “But the reality of the situation is it has been reduced and it will be reduced further.”

Chamber of Commerce Executive Director Sandy Forstner echoed Sherman’s sentiments.

“Don’t think that we jumped right on the bandwagon and said, ‘Oh, let’s cut LGA as part of the budget solution.’ We did not,” Forstner said to council members at the meeting. “We realize the implications and that it’s half of your general operating budget. And we realize the implications to the taxpayers. But we’re getting more LGA this year than we ever have before.”

However, Austin may not end up receiving the amount of LGA the state certified them for last year due to the budget crisis.

“We budgeted for (the LGA) because it’s certified but we also know that what the state has done to us in the past means don’t count on getting it,” Jeff Austin, Ward 1 council member, said.

Members of the two groups agreed that someone will be the brunt of the state’s budget crisis – it’s just a matter of whom.

If LGA is cut, property taxes could see a major increase. According to the Department of Revenue, property taxes increase by 67 cents for every dollar of LGA that is cut. But Forstner said if LGA is kept intact, the Legislature is more likely to implement sales tax on clothing and groceries, which would alter local business’ ability to thrive.

“From the Chamber’s position, basically the decision is: Does government make the cuts or are we asking the taxpayers and the businesses … to pay more?” Forstner said. “Tax increases cost jobs. It’s a question of which pocket do you want to take it out of.”

Although the Chamber did not give indication by the end of the meeting that it would support a resolution to keep LGA as is, City Administrator Jim Hurm asked for its understanding of the situation.

“Maybe say you recognize everyone has to take a bite out of this, but please don’t take a bigger bite than out of others,” Hurm said.