Management Report and Recommendations 12/31/1982

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City of Lino Lakes Management Report, Page 5 As a consequence of the above reductions (to local government except school districts) 1982 property tax related State aid payments actually decreased from 1981 levels. More important, this decrease represents "lost revenue" to the local government II units. This factor has been viewed by a bond rating agency as a limiting factor in the ability of Minnesota cities to retire bonded debt. This situation can severely and adversely affect the individual bond ratings of all Minnesota cities. The above reductions represent "lost revenue" from tax -levy related State aids. This was not the only "lost revenue" for Minnesota cities in 1982. The State also reduced local government State aid to Minnesota cities, counties and towns, as follows: Year 1981- Actual 1982 - Certified 1982 - Actual City of State Total Lino Lakes Amount Percent Percent (in 1,000's) Change Amount Change $ 249,716 1.69% $ 157,862 7.75% 270,725 8.41% 171,011 8.33% 235,077 (13.17 %) 148,794 (12.99 %) The above reduction of $35.6 million ($270,725,464 certified to and budgeted by local government; less $235,076,945 actually paid to local government) when added to the $42.1 million reduction in tax -levy related State aids represents "total lost revenue" . II of $77.7 million for 1982. These combined reductions represent approximately 7% of the total 1982 certified tax levies for Minnesota Cities, Counties and Towns. The City of Lino Lakes portion of this "lost revenue" totaled approximately $34,000. The State of Minnesota (as part of its policy of limiting local property tax increases) also adopted a policy of sharing its tax revenues with local government and local taxpayers in the form of aids and credits. The State's primary source of revenue are income taxes (both corporate and personal) and sales taxes. These financial resour- ces comprise over 75% of the State's non - dedicated operating revenue for the State's II General Fund. Total State revenues increased by approximately 3% (each year) during the