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Thursday, July 7, 2011

Counties try to cope with effects of state shutdown | Minnesota Public Radio News

Counties try to cope with effects of state shutdown | Minnesota Public Radio News

Counties try to cope with effects of state shutdown

by Dan Olson, Minnesota Public Radio
July 6, 2011

St. Paul, Minn. — Minnesota's two most populous counties say nearly all their services are intact on day six of the state government shutdown. Hennepin and Ramsey counties account for nearly one-third of Minnesota's population.

However, officials in the two counties say they are worried about timely arrival of state dollars which fund many of their services.

Counties deliver most of the state's social services. Minnesota's most populous is Hennepin, with more than 1.1 million residents. About 250,000 have some form of contact with the county's human service and public health departments.

Curtis Haats, the department's chief financial officer, says most of the services they offer, from child protection to child support, are still operating.

Haats believes they'll continue to get state money during the shutdown, because in many cases the state funds match federal dollars which the court has said the state must keep paying to counties.

"The way it looks, a lot of the block grants that fund our social services would continue, and that would mean that all of our services would be funded," said Haats.

Haats says a couple of exceptions are suspension of a smaller state grant to move people who are chronically homeless into permanent housing, and money to fund a welfare fraud detection program.

Haats says the welfare fraud program brings in $5 for every $1 of expense, last year amounting to $5 million in recovered public money.

Many county services are mandated by state laws and regulations. Counties rely on two checks a year from the state, called county program aid, to help pay the costs, according to Mark Stenglein, vice chairman of the Hennepin County Board.

Stenglein says it appears likely -- but not certain -- at this point that Hennepin County's next program aid check will arrive next week. It should amount to between $10 million and 14 million, depending on budget negotiations.

"Probationary services to watch offenders, or mental health services the state mandates we have to do, and they pay for it, but it's in question now and our check is due from the state," Stenglein said. "Minus that, that leaves us only to backfill it from our own property taxes."

Hennepin County recently notified 1,200 of its 7,500 employees they may be laid off because of the state government shutdown, although they remain on the job at the moment.

In Ramsey County, with 508,000 residents according to the 2010 census, officials expect their July 15 county program aid payment of just over $8 million will arrive as expected.

Part of the reason for their optimism is the court ruling that cities should continue to get their LGA, or local government aid payments, which is a state program virtually identical in language to county program aid.

At the moment, Ramsey County does not anticipate layoffs among its 3,700 employees, according to County Board Chairwoman Victoria Reinhardt.

"As soon as we realized in December of last year what the deficit was, we started taking action at that point; soft hiring freeze, other things to kind of help brace us for that," said Reinhardt. "We've never been a county that has waited until the crisis is there to respond."

In both Ramsey and Hennepin counties, construction on most road and bridge projects continues.

That includes the biggest transportation project in both counties, the nearly $1 billion Central Corridor light rail line between Minneapolis and St. Paul, and the $100 million Lowry bridge replacement.

In Ramsey County, officials are asking the court for permission to continue county construction on portions of two projects the state has suspended because of the shutdown.

The ties between state government and Minnesota's 87 counties are tight and multi-layered.

Officials in Washington County, for example, wonder how the state government shutdown may affect services there ranging from child protection to state inspection of county fair food vendors.

In all cases, officials say they can maintain most services for a while longer -- although they won't say exactly how long.

If necessary, they can tap cash reserves to keep services going. But if the shutdown drags on, they say their options become much less clear.

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