08-24-1983 Council Agenda - Laserfiche WebLink

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Mr. Joseph G. Chlebeck August 3, 1983 Page 2 At that time, no community was able to alter its spending habits in order to manipulate its local revenue base to maximize its aids. In fact, two of the cities whom the critics characterized as high spenders, Minneapolis and St. Paul, had their levy limits arbitrarily reduced by 15 percent when their local revenue base was established in 1979. It follows, then, that any changes in a city's expenditure pattern since 1979 have had no effect on that community's local government aids. You may also remember that since adoption in 1979, the current local government aids have been calculated based on a "needs" type formula. "Need," or a community's local revenue base, is established as the sum of the city's or township's 1978 -1979 levy limits, plus its 1979 local government aid, adjusted for inflation. From this "need" factor, then, is subtracted what can be raised locally by a levy of 10 equalized mills. The difference is the city's or township's local government aid, subject to any minimum or maximum limitations. In the final analysis, some cities and townships around Minnesota received an aid reduction for 1984 because the city could raise a vast majority of its needs locally without unduly burdening its taxpayers. I quite honestly was not pleased that some cities in my district have lost aid, but when the entire scenario is presented, particularly the increased local levy authority and the aid loss limits, against the backdrop of the critical financial situation our state has endured over the past months, I believe the 1983 package is a responsible approach toward balancing the need for reducing state expendi- tures with the equally important need to maintain vital local programs and services while continuing reasonable and equitable property tax relief. Again, thank you for contacting me. If you have additional concerns or questions, please do not hesitate to get in touch with me. JMH:pm V