06-03-1991 WS - Laserfiche WebLink

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5 IV. Special levies The original House bill contained a provision limiting use of bonded debt special levy. That has been deleted from the final bill. Bonded debt remains an uncapped special levy as it has been for two decades. The only significant city change to the special levy section was the addition (roll in) of the pension special levy to the 1992 base at the 1991 level without increase. V. Homestead and Agricultural Credit Aid (HACA) One of the major concerns of legislators when discussing reduction of the class rates for high valued homes and C/I property was the very large tax shift onto low valued homes and other property to replace the reduced taxable value. This was especially difficult because of the state's$1.1 billion shortfall. The solution became possible with adoption of the increased half cent sales tax option. The extra funds allow the state to replace on a dollar-for-dollar basis the city/county lost revenue created by the value reduction, thus preventing an increased tax burden on other property. These payments will be made to cities in the form of HACA and the largest beneficiaries will be generally metro cities with a great deal of high valued homes and C/I property.many of which currently receive very little LGA or HACA. Over the next three years, $211 million (preliminary legislative estimate) is budgeted to buy down the class rate reductions, of which about$175 million (or 84 percent) will be distributed to metro area cities. The sales tax increase and the 2-cent dedication to local government- both city and county -provide a continually growing pot of money which, hopefully,will make future LGA/HACA reductions unnecessary. VI. Local Government Trust Fund This fund will receive revenue from the half-cent optional sales tax plus 1.5 cents of the current six-cent sales tax, or a total of two cents from the sales tax statewide. The fund is dedicated to pay for existing non-school aid programs including LGA,HACA, disparity reduction aid,equalization aid, attached machinery aid, border city disparity aid and a few other minor programs. There is some income maintenance takeover funding equal to about 0.1 cent initially to balance the dedication at two cents. The fund is prejeet-ed-to-grow at about=_a.- - . . • • ' r . •ne allocated primarily to city/county_new and existingproperty tax relief programs. Revenue is expected to be $700 million in 1991-92 (11 months), $786 million in 1992-93, $842 in 1993-94 and $898 million in 1994-95. For 1991 and 1992,the distribution will be as per current formula. For 1993 and thereafter, it may change based on recommendations of a new Advisory Commission on Intergovernmental Relations (ACIR). ACIR initially will have as members four city officials, three county commissioners, one town board member, five representatives, five senators and two members of the governor's staff. VII. Referenda Levy on Market Value All general education referenda (not including school capital bonds) and non- school referenda (cities, towns and counties) held for taxes payable in 1993 and thereafter will be levied on the market value rather than on the net tax capacity of