Quick Hits 12-08-10

Crowding Out Charities

Newsweek reports a study in the Journal of Public Economics that finds that government funding of non-profit organizations decreases private donations by $7271 for every $10,000 in government grants. Plus, the non-profit groups decrease their fund raising efforts by $1370.  If one assumes that government administrative costs are 10-15 percent; can one infer that government grants have no net effect on non-profit revenue?

League 2011 Legislative Policies

One can find the League of Minnesota Cities 2011 Legislative Policies if one is in the mood for a little “light reading.”

League of Cities State Budget Analysis

The League of Minnesota Cities also conducted a webinar earlier this week that analyzed the most recent state budget forecast for Minnesota.  You can view the presentation in its entirety along with the slides on the League web site.  You will not find a more thorough analysis of the forecast and how it relates to cities and others. 

Here is a quick summary from my last Weekly Memo.  The state is showing a $399 million surplus in the current biennium according to the just-released state budget forecast.  The bad news is that the projected deficit for the next biennium grew slightly – from $5.8 billion to $6.4 billion.  Federal health care stimulus dollars was the primary driver of the small surplus for this biennium.  This means that there will be no further unallotment for 2010.  The report was characterized by most, including Rep. Morrie Lanning (R-Moorhead), as “Nothing earthshattering.”

Perception is not reality

According to a recent poll, Americans on average believe that the US spends 27 percent of the federal budget on foreign aid.  Most think it should average around 13 percent.  The actual percentage is 0.6 percent.

Here are some other leftovers from the weekly memo.

Spice update

The Federal Drug Enforcement Administration (DEA) has begun a 30-day process that would make “Spice” illegal.  The DEA regulates the substance on its own authority for at least a year; or until state and federal legislatures can officially codify new laws against the so-called synthetic marijuana.

Campground revenue

The Red River State Recreation Area (RRSRA) campground grossed $204,769.47 in 2010 according to Department of Natural Resources officials.  Of that total, $19,341.65 was state sales tax and surcharges.  The remainder $185,427.82 results in a revenue-sharing check back to the City of $10,353.  The state also has assumed the utility expenditures for the state campground.  Utilities typically run about $12,000 per year.  Therefore, the City has captured over $22,000 from the campground annually in addition to the base fee of $109,000 per year.  We are awaiting word back from DNR regarding an expanded agreement that would cede ownership of RRSRA land back to the state.  The City would receive in exchange reimbursement for maintenance activities provided by the City including mowing and trail maintenance.  These reimbursements would net another $25,000-$30,000 annually.