State Auditor Julie Blaha Releases 2021 State of Main Street - March 10, 2021

Cities and counties face a careful balancing act

Saint Paul, MN – Earlier today, State Auditor Blaha presented the annual 2021 State of Main Street. This year’s State of Main Street looked at the on-going impact of the COVID-19 pandemic on city and county finances and what that says about our past and future COVID-19 responses. The State of Main Street is designed to help decision makers with choices that can keep local governments strong.

Analysts at the Office of the State Auditor (OSA) reviewed original 2020 city and county budgets and compared them to proposed 2021 budgets. The OSA found that a mix of stimulus, spending reductions, and the use of fund balances balanced lower revenue growth of Minnesota’s cities and counties.

“The key finding of this year’s State of Main Street is that local governments faced a careful balancing act in 2020 and stayed on their feet,” said Auditor Blaha. “City and county budgets reflect a cautious approach to 2021, as we’ve seen 2021 budgets showing flat or decreased levels of overall revenues and expenditures when compared to 2020.”

“On the revenue side, local governments will continue to rely on property taxes, as they remain the largest revenue source for both counties and cities,” said Blaha. “In addition, some cities are bracing for a reduction in all other taxes, such as sales, liquor and hotel/motel taxes. On the expenditure side, counties and cities are both controlling what they can in 2021, with the largest decrease in capital outlay.”

Blaha continued, “Another take away from the budget analysis is the use of fund balances to help stabilize budgets. It’s a good reminder of the importance for local governments to set aside funds to help them weather unexpected events.”

“In general, the lasting effects of the COVID-19 pandemic had a greater negative impact on larger city and metro local government budgets.” noted Blaha.

“Lastly, we also believe that the Federal Coronavirus Aid, Relief and Economic Security Act (CARES) funding helped counter the financial impacts of the pandemic in 2020,” said Blaha. “I will continue to call for additional federal and state pandemic relief efforts for local governments because it appears to have made a difference.”

You may read the entire State of Main Street Summary here.

Today’s State of Main Street presentation may be viewed in its entirety on our OSA YouTube page here.