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City of Lake Elmo, Minnesota Management Report, Page 7 metropolitan communities is significantly higher. This means that those Cities with a higher tax base may levy equal amounts as cities with less tax capacity and burden homeowners less. The most likely method of increasing tax capacity values is the addition of commercial development. The City of Lake Elmo has been cautious in considering such development. City, County and School District tax levies are increasing because of State budget problems. The impact of increasing property taxes mandated by State actions on cities with low tax bases may be disastrous. We recommend that the City prepare plans to either 1) take actions to improve the tax capacity base of the City and/or 2) notify property owners of increasing tax burdens based on State legislative actions. The General and Special Revenue Funds of the City are maintained to account for the current operating and capital outlay expenditures common to all cities. These basic services include (but are not limited to) public safety, public works, public welfare and general government State aids (including local government aid, homestead credit and other minor State aids) and local property taxes used to finance the General and Special Revenue Funds of the City of Lake Elmo were as follows: Year 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 State Aids Amount Percent $151,224 32.01% 192,886 45.29 199,715 38.76 187,436 36.46 216,371 37.26 199,587 31.33 208,347 29.89 226,053 30.28 243,944 32.71 279,386 32.93 345,140 38.80 189,795 21.19 Property Taxes Amount Percent $147,345 31.19% 128,921 30.27 163,162 31.67 178,466 34.72 194,930 33.57 262,487 41.20 282,353 40.70 301,663 40.40 323,384 43.36 391,481 46.14 369,221 41.51 464,135 52.09 * 1990 based on City budget and State estimates.