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515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www. ci.little- Canada. mn. us <br />MEMORANDUM <br />TO: Mayor Fahey & Members of the City Council <br />FROM: Joel Hansoms, City Administrator <br />DATE: February 8, 2002 <br />RE: 2002 Budget Issues <br />MAYOR <br />Michael 1. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Matt Anderson <br />Rick Montour <br />ADMINISTRATOR <br />Joel R. Hanson <br />As you know, the State's budget deficit could have a substantial impact on cities. Based on the <br />Governor's proposal, we would lose $40,141 in Local Government Aid in 2002 and a total of $140,088 in <br />2003. (These are permanent reductions!) You may ask how we can lose over $140,000 of aid when our <br />local government aid is only budgeted at $77,770 in 2002. The answer lies in the new market value <br />homestead credit. (See information sheet prepared by the League of Minnesota Cities entitled <br />"Governor's Proposed Local Aid Cuts: Frequently Asked Questions ") <br />The House and Senate proposals are much more favorable to cities. (See FridayFax dated February 8U1) <br />Neither of these options proposes any cuts to our aid. However, they do propose the elimination of the <br />TIF grant program that may impact our redevelopment efforts. The Governor is also critical of their <br />proposal so changes are likely. <br />While more Legislative discussion will occur on this topic, it seems we will be impacted in some manner <br />by the State's budget woes. To that end, staff will begin compiling some options to consider addressing <br />any reductions in our intergovernmental revenues. In the meantime, we would welcome any comments or <br />questions you may have regarding this matter. <br />