Comparing Minnesota's Prices of Local Government

Where in Minnesota is local government’s claim on the economy and the income of local citizens the greatest?  How do local governments’ fiscal footprints differ across the state?  And how does the ability to export local tax burden to non-residents affect this footprint?

Our new report "Comparing Minnesota's Prices of Local Government" explores these and related questions by measuring the relative cost of local government to residents on a county-by-county basis across the state.

Based on the most recently available data (2013/14) we replicate the methodology Minnesota Management and Budget uses to create the state’s Price of Government report and apply it to local governments -- cities, counties, towns, schools, and the Metropolitan Council -- to calculate a Price of Local Government (POLG) for all 87 Minnesota counties.

Since “personal income” overstates the income that can be used to actually pay taxes and other charges to local government,  the report also includes three alternative POLG measures all based on county “cash income.” Each cash income based measure offers a different perspective on the financing of all local governments within each of Minnesota’s 87 counties:

  •     cash income POLG (which captures local governments’ claim on income local residents can actually use to pay taxes and fees);
  •     cash income POLG, net of local tax exporting to non-residents; and
  •     cash income POLG, based on local effort property taxation only.

Our accompanying state maps show the “Price of Local Government” across Minnesota depends heavily on the measure used.   Not only do the individual prices of local government and a county's relative position to the rest of the state change — often dramatically — depending on the measure chosen, regional patterns are also affected.