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At one point in late-2024, Ely city officials publicly hoped that local government aid would increase.
Now, they’re working frantically to maintain what they have.
Amid discussion in St Paul of a potential LGA cut, Ely Mayor Heidi Omerza penned a letter to State Sen. Grant Hauschild (D) voicing concern while the city’s budget committee addressed the potential ramifications of a decrease in the city’s largest source of revenue.
According to minutes of the city’s May 19 budget committee session, a 1.5 to 3.1 percent LGA cut proposed in a Senate tax bill would decrease city revenue by $45,000 to $88,000.
The high-end of that cut would force a city property tax increase of 3.8 percent just to make up for the loss Omerza wrote in a May 12 letter to Hauschild.
Omerza also noted that, given inflation, another three percent hike would be needed “to stay status quo with the services the city provides.”
LGA, which sends state funding to cities based on an assortment of factors ranging from population to the age of the community’s housing stock, remains the largest single source of revenue.
In 2026, LGA funds make up 72.1 percent of general fund revenue at $3,152,500, with property taxes funding another $689,600, or about 16 percent.
While the city got a sizeable increase in LGA In 2024, this year the city received a hike of $3,400 or just over a tenth of one percent.
Ely’s property tax levy climbed seven percent this year in part because of the flat LGA.
“With the proposed permanent cut for 2026 and the possibility of not seeing an increase of LGA into the future, the Ely taxpayers may not be able to support the current services provided.”
Omerza’s letter was sent May 12 and without prior council action, which prompted questioning Tuesday by Ely’s newest council member, Emily Roose.
Harold Langowski, Ely’s city clerk-treasurer, explained that the letter came in part due to a “call for action” from groups that represent small cities such as Ely.
“On an ongoing basis there are issues that come up especially during a legislative session where we get notifications or a call to action,” said Langowski. “It has been standard practice that when issues do arise we send a letter.”
Langowski said that for items such as specific state bonding or funding requests coming from the city, that the council pass a resolution, but he cited the LGA issue as one “that we respond as quickly as possible.”
“As far as priorities go, LGA has always been the top priority,” said Langwoski. “Time is of the essence when we present those items to legislators.”
In other business Tuesday, the council:
• Heard a report from Jess Edberg, executive director at the Dorothy Molter Museum, about the organization’s activities.
• Added the dedication of the canoe sculptures at Whiteside Park, set for July 1, to the city calendar.
• Accepted Bud Ahrens’ resignation from the parks and recreation board.
• Approved a lease agreement with the Ely Little League related to use of the Little League field, which is city property.
• Supported moving forward with the development of the Bog Walk by the Trailhead, in conjunction with the North Country Trail Association and requested participation of the Tree Board.
• Granted temporary liquor licenses to the Ely Fire Relief Association for the July 5 Rock the Park event as well as the Blueberry/Art Festival July 25-27.
•Approved a residential rehabilitation loan for Eric Glasson and Lacey Squier at 417 West Shagawa Road.
• Accepted a recommendation from the budget committee and directed the Paid Family Medical Leave tax to the human resources committee for consideration during negotiations.
• Agreed to repost for a police officer opening.
• Heard from former council member Paul Kess about recent work of the lodging tax board, including struggles linked with collecting taxes generated in Lake County.
