Rural cities, such as Marshall, are bearing the brunt of Governor Tim Pawlenty and the state's budget balancing because of cuts to local government aid, representatives of the Minnesota 2020 organization said in a stop in Marshall Thursday.

"The core message we have is if the state and the Governor are doing additional cuts in LGA, cities will have to cut essential services," said Matt Entenza, the chairman of the 2020 board and former DFL legislator. In January, Entenza indicated he was interested in running for governor in 2010.

Minnesota 2020 and the Coalition of Greater Minnesota Cities worked with Macalester College in the fall to survey mayors of rural Minnesota cities such as Marshall. The survey was completed before Pawlenty unalloted several million dollars in LGA in December.

Mayors said if there are more cuts in LGA in 2009 and 2010, core essential services such as police, fire, parks, street and other services would need to be cut, Entenza said.

Alex Carey, the greater Minnesota press secretary for Pawlenty, said in a Thursday interview an organization headed by a DFLer who wants to run for governor should not be taken seriously.

Cuts proposed for 2009 are capped at 5.1 percent of the city's levy plus aid, Carey said.

"Most cities have options and ways to reduce spending without (negatively) impacting the police force," Carey said. "And there are exemptions for police and fire departments..."

"It's a matter of tightening their belts," Carey said.

"(Cities) don't need a lecture about belt tightening, they've done more of it than the state," said Jeff Van Wychen of Minnesota 2020.

Rural Minnesota cities have cut spending more than the state has, Entenza said.

As an example, Marshall has lost about $1.3 million in state LGA and market value homestead tax credit from 2002 to 2008, Van Wychen said. The number is adjusted for inflation, he said.

Marshall has lost about $108 per capita in state aid from 2002 to 2008. The city raised property taxes to gain $72 per capita back but still has a net loss of $36 per capita, Van Wychen said.

"Even after property taxes have been raised, there is still less money in their pocket," Van Wychen said.

Entenza said Pawlenty and the Legislature have a history of using LGA as a slush fund and have used it to help balance the budget when it's only about 2.8 percent of the state's budget.

And now, rural cities are faced to further reduce expenses and services with the prospect of more losses in LGA, Entenza said.

If rural cities such as Marshall are forced to reduce police, parks, fire and other essential services that will impact the quality of life and the economic environment of the city, Entenza said.

A business may leave or not locate or expand in a rural city and if that happens, the entire state's economy suffers, Entenza said.

That's why the state must make sure the burden is spread more evenly, Entenza and Van Wychen said.

It's not accurate to say or believe rural cities have been forced to increase property taxes because of cuts in LGA, Carey said.

"There is fat that can be trimmed," Carey said.

In general, cities need to do a better job of shared services and reducing duplications in services to be more efficient, Carey said.

Also, a significant number of Minnesota cities have also increased salaries of employees during the past few years and that has contributed to some of the local budget woes, Carey said. "There are a lot of salaries that can be cut or reduced," Carey said.

Mayors in the 2020 survey will consider cutting or freezing salaries, Entenza said. About 30 percent are talking of doing that, Entenza said.

For some, it may not be freezes but could be cuts and even cuts in positions, he said.

It's not as if the rural cities have bloated budgets or staff, Entenza and Van Wychen said. Many have made reductions to staff during the past several years and now, there are few places to cut or reduce, they said.

Carey said cities should be using budget reserves now. Reserves are a rainy day fund, "right now it's raining," Carey said.

As far as using city government reserves to offset cuts in LGA, Entenza and Van Wychen said that's not really the wisest course of action.

Cities receive LGA and local tax payments twice a year and when a city is paid twice a year, it must have a reserve, Van Wychen said.

"In times like this, you don't want to run down your reserve," Van Wychen said.

Even a bipartisan state committee that includes some Pawlenty appointees has recently recommended the state must build up reserves during this economy, Van Wychen said.