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1111 <br />vthllffi <br />Mi league of minnesota cities <br />December 20, 1982 <br />Dear City Official: <br />This letter is being sent to you to clarify the current position of the League of <br />Minnesota Cities with regard to the formula for the distribution of Local Government <br />Aid. This is potentially an extremely divisive issue. Since disunity could hurt all <br />cities, the League is committed to acting as a forum where cities can continue to <br />resolve their differences among themselves. <br />Thus, the League Board of Directors has taken cognisance of the urgency of this matter <br />and has scheduled meetings on January 14 and 15 for this purpose. On January 14, the <br />Board will conduct a hearing on proposals to alter the Local Government Aid <br />distribution formula. The Board invites all cities to submit comments or suggestions. <br />Those wishing to appear at the hearing should contact Ann Higgins at the League Office <br />to reserve a place on the hearing agenda. The LMC Board will also request <br />presentations from a group of metropolitan cities, the City of Minneapolis, and the <br />Local Government Policy Task Force (appointed by Governor Quie). Each has developed <br />different approaches to making changes in the method of LGA allocation. <br />The LMC Board of Directors has constituted itself as a task force to review these <br />alternative LGA formula proposals from the perspective of principles recommended by the <br />League Revenue Sources Committee and approved by the Board this past week. Those <br />principles state <br />• Any LGA increase or decrease to an individual city resulting from the new <br />formula should be phased in. <br />• The annual LGA appropriation should increase in accordance with any increase <br />in the State's General Fund revenues. Cities can then responsibly plan on LGA <br />as a revenue source with assurance of a specified level of state commitment to <br />the program. <br />Any city which suffers a reduction in LGA payments as a result of a new <br />formula must be allowed to offset that revenue loss by increasing the local <br />property tax levy. <br />LGA Payments should be distributed to cities monthly, but not less than <br />quarterly. <br />183 university avenue east, et. pain, minnesota 55101 C612) 227 -5600 <br />