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year or two. <br /> 4. TAX BASE EQUALIZATION <br /> The 1989 Special Session tax bill provided a Tax Base <br /> Equalization distribution of $18.9 million split $2.7 million <br /> metro and $16.2 million outstate for cities other than 1st. <br /> class cities. The distribution was based on a portion of the <br /> city only three year average levy reduced by disparity aid and <br /> LGA and limited to a maximum increase of 15%. The <br /> Equalization Aid formula was for 1990 only but the $18. 9 <br /> million distribution was then rolled into the regular LGA <br /> base, thus grandfathering the distribution for 1991 and <br /> beyond. For purposes of the state budget, aids such as LGA <br /> for local governments in calender year 1991 are expenditures <br /> in the next state fiscal biennium. <br /> The Coalition of Greater Minnesota Cities (CGMC) has a <br /> proposal to make permanent the Tax Base Equalization formula, <br /> increase the percent of levy it applies to, increase the <br /> distribution at least to $30 million plus, and to include St. <br /> Paul and Duluth. <br /> The AMM General Policy position is in opposition to any Tax <br /> Base Equalization formula that only considers property wealth <br /> and does not consider the level of service or type of service <br /> included in the subsidy. The formulas to date have only dealt <br /> with property wealth. <br /> The 1990 Legislature must solve a budget deficit of over $200 <br /> million for the current biennium which could directly impact <br /> 1990 LGA and HACA distributions and indirectly impact the base <br /> for 1991. In addition the 1990 Legislature must establish <br /> 1991 aid distributions which means they will have to deal with <br /> Tax Base Equalization as proposed by the CGMC. Concurrently, <br /> : • _ - . ' . - • g an. isca -o icy is <br /> scheduled to do a major analysis of the purpose and basis for <br /> LGA, etc. <br /> Therefore, it seems that it would be premature to enact any <br /> permanent structural change to the aid system prior to the <br /> completion of the Legislative study especially one that would <br /> create large increased budget tails in the next biennium. <br /> Using this reasoning as a basis, the AMM Board of Directors <br /> adopted the following specific policy for Tax Base <br /> Equalization for 1990: <br /> 'The AMM Board of Directors supports the grandfathered <br /> extension of the 1990 Tax Base Equalization Aid distribution <br /> . to be included as part of 1991 LGA base, but does not <br /> support increased Tax Base Equalization Aid for 1991 nor <br /> -4- <br />