Management Report and Recommendations 12/31/1990

Home Search

City of Lino Lakes, Minnesota Management Report, Page 7 The "City Initial aid increase" (Option II) is the lowest of the four optional calculations. This would have resulted in no increase, however, the minimum aid increase is 2% of prior year LGA. Using the table above, LGA for The City of Lino Lakes for 1990 and 1989 is determined as follows: 1990 1989 Initial aid increase $6,625 $82,761 Additional aid increase 15,992 Prior year aid 331,225 232,472 Reduction for State demographer costs (268) (13) Initial aid 337,582 331,212 Less subsequent legislative adjustments: Aid transfer to schools (3.4% of net tax capacity) (148,175) 1990 legislative session retroactive aid cut (26,304) Final Aid $163103 $331,212 The State has calculated a 56% increase in City tax capacity (from $835,103 to $1,305,168) for the City of Lino Lakes. This type of increase prevents many cities from comparing favorably with the household guarantee amount. The 56% tax capacity increase does not indicate that property values increased by 56% in Lino Lakes. The 1988 statutes included a provision to effectively increase tax capacities through use of an equalized sales ratio as calculated by the Department of Revenue as follows: 273.198 (e) "Equalized market values" are market values that have been equalized by dividing the assessor's estimated market value for the second year prior to that in which the aid is payable by the assessment sales ratios determined by class in the assessment sales ratio study conducted by the Department of Revenue pursuant to section 124.2131 in the second year prior to that in which the aid is payable. For computation of aids payable in 1989 only, if the aggregate assessment sales ratio is less than or equal to 92 percent, the assessment sales ratios by class shall be adjusted proportionally so that the aggregate ratio of the unequalized market values to the equalized market values equals 92 percent; otherwise the equalized market values shall equal the unequalized market values divided by the assessment sales ratio.