Management Report and Recommendations 12/31/1982

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City of Lino Lakes Management Report, Page 7 Minnesota State Statutes governing State finances required "balanced budgets" at the end of each biennium (i.e. June 30, 1979, 1981, 1983, etc.). The State's current operating budget (fiscal year ended June 30, 1983) indicates revenues in excess of expenditures totaling approximately $600,000,000 to eliminate most of the June 30, 1982 accumulated deficit of $705,268,000. A portion of this "improvement" has been at the expense of local government as detailed in this Report. An additional portion of such "improvement" has or will be accomplished by what has come to be known as "shifting" (i.e. delaying payment of existing obligations and /or advanced recognition of future 1 1 1 1 1 1 revenue). The following is a tabulation of certain major "shifts" and estimates of II their effect upon the State's June 30, 1983 fund balance. • LOCAL GOVERNMENT AID - Change in payment dates from March to July through December of each year ($265,073,300 @ 25 %) • RENTERS CREDITS AND SENIOR CITIZEN AND DISABLED TAXPAYERS CREDITS - Change in payment dates from pre -July to post -June of each year (Estimate) • SCHOOL DISTRICT PROPERTY TAXES - 1. Hold back 15% of tax levy related State aids until after June 30, 1983 (State Estimate) 2. Advance recognition of 1983 local property taxes with a corresponding decrease in State aid payments (State Estimates including increased holdback from 10% to 15 %) for Education Aids) $ 66,300,000 100,000,000 49,700,000 233,000,000 Total $449,000,000 The "shifting" concept as it relates to aids and credits has the effect of deficit financing when one considers the State and all units of local government within the State as a group. The use of this concept at the levels shown cannot continue indefinitely. The use of "shifting" prolongs but does not resolve the State's budget problem. 1 1 1 1 1 1 1 1 1 1 1 1