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I City of Lino Lakes <br />Management Report, Page 4 <br />1 <br />II <br />owners (after deducting homestead and other credits) increased by less than <br />property g Y <br />The above comparison of 1981 and 1982 tax levies clearly indicates a significant <br />change in financing Minnesota local government. Prior to 1982, property taxes paid by <br />I4 -1/4% per year (1972 through 1981). The 1982 increase alone totaled 24 -1/4 %. The <br />largest part of this increase can be attributed to a change in State policy relating to <br />the financing of local education. <br />1 <br />1 <br />1 <br />1 <br />Minnesota City and County tax levies are controlled by State levy limitation <br />statutes. Minnesota School District tax levies (for general education costs) are <br />controlled by State Foundation Aid Program calculations. Prior to 1982, the State <br />(through education aids paid to local school districts) financed approximately 55% of <br />these costs. The remaining 45% was financed by local property taxes. This formula was <br />IIchanged in computing the 1982 property taxes such that local property taxes provided 55% <br />of this revenue while State education aids provided 45% of the total revenue. State <br />IIbudget proposals for 1984 decreases the State portion to 40% with local property taxes <br />providing 60% of this revenue. The change in State policy was a primary cause of <br />increased local property taxes in 1982 and is indicative of future trends. <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />State -wide credits deducted from taxes levied increased by $68,098,000 or 12.81% for <br />1982 over 1981. This, however, is misleading. These amounts represent credits deducted <br />from taxes levied. Prior to 1981, these amounts were entirely paid to local government. <br />During 1982, however, the State did not reimburse local government for the full amount <br />of these credits even though these credits were deducted from property taxes levied by <br />local government. Actual State payments for these credits to local government units <br />except school districts were reduced (from the anounts deducted from property taxes <br />levied) as follows: <br />Aid <br />Homestead Credits <br />Reduced Assessment Credits <br />Wetlands Credits <br />Native Prairie Credits <br />Total Reduction <br />Reduction <br />Amount Percent <br />$40,802,526 16.45% <br />1,173,911 14.03% <br />119,532 6.49% <br />13,843 22.84% <br />$42,109,812 16.30% <br />