06-03-1991 WS - Laserfiche WebLink

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• 4 • Classification 1991 1992 1993 1994 CABINS 2.3 percent 2.2 percent 1st$72K 2.0 percent 2.0 percent market value more than$72K 2.5 percent 2.5 percent VACANT LAND 4.95 percent 4.75 percent highest and best use per zoning III. Aid cuts/levy limits 1991, 1992 As earlier mentioned, the total LGA/HACA cuts exceeding the cuts already passed is $70 million - $35 million in December 1991 and$35 million in 1992. The Revenue Department indicated that the December 1991 aid cut is 1.6 percent of base, or about 80 percent of the July 1991 cut. (NOTE: this is a preliminary figure.) Aid cuts in 1991 are temporary. Thus,the pre-cut 1991 certified levy base is restored prior to calculating aid reductions and levy for 1992. . Aid cuts for 1992 will be $86 million: $35 million new and $51 million contained in the 1990 tax bill. These cuts are permanent and, according to the Revenue Department, amount to about 4 percent of the restored 1991 revenue base. Levy limits are very strict. By the end of the session it was clear that everyone, including the governor,wanted only single-digit overall increases. The good news is that cities and counties may levy to recover the loss of revenue due to the permanent$86 million LGA/HACA cuts for 1992. The bad news is the 3 percent inflation for growth is gone. The net effect of aid cuts and levy limits is that a city's levy base, aid plus levy, or total for 1992 is the same as was certified for 1991.The only difference is that the aid portion of the '92 base will be less and the general levy portion will be more. The following chart illustrates the interaction of aid cuts and levying authority: City A City B City C LEVY I AID f TOTAL LEVY I AID I TOTAL LEVY I AID I TOTAL Original Pay 2991 70 30 100 50 50 100 30 70 100 July aid cut($50M) -2 -2 -2 Dec.aid cut($35M) -1.6 _ -16 -1.6 End 91total-70- 26.4- _96.4— 50------ 46.4 _ 96.4-- 30 66.4 __ 96.4 pay 1992 start(same 70 30 100 50 50 100 30 70 100 115-.9.1.1 -2.4 -2.4 -2.4 19990 law cut($51M) New aid cut($35M) -1.6 -1.6 -1.6 New levy authority 4 4 4 1992 total 74 26 100 54 46 100 34 66 100 Percentage levy 5.7% 8.0% 13.3% increase(allowed) ..