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City of Lino Lakes, Minnesota <br />Management Report <br />General Fund <br />The previous graph indicates that 1) State aids to cities have been relatively flat since <br />1993; and 2) that the City of Lino Lakes gained on State averages in 1993 through 1997. If <br />State aids do not keep pace with inflation and other service cost increases of growing cities, <br />Minnesota cities will require careful analysis of service levels that they can fund. This is <br />particularly the case in light of tax levy limits imposed by the 1997 State legislature. <br />The LGA formula is quite complex. However, an analysis of the components of the <br />formula provides an understanding. The following illustration identifies the components of the <br />LGA formula: <br />Ilmor <br />ti roar <br />City Base Aid <br />1993 LGA <br />City Formula Aid <br />Tax Increment <br />Penalty <br />LGA <br />Price Index <br />Change <br />Since 1993 <br />x <br />City <br />Revenue <br />Need <br />City <br />Population <br />City Tax <br />Capacity <br />x <br />Average <br />Tax Rate <br />For all Cities <br />City revenue need is equal to the sum of the following items: <br />3.462312 x Pre -1940 housing percentage <br />+ 2.093826 x Commercial industrial percentage <br />+ 6.862552 x Population decline percentage <br />+ 0.00026 x City population <br />+ 152.0141 <br />= Subtotal <br />x Price index change <br />= City revenue need <br />Page 16 <br />