Agenda Packets - 1985/12/02 - Laserfiche WebLink

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MEMO To: MAYOR AND CITY ('nnN('IL (5 N�FROM: KINANI'K DIHh:("1'uk-'f kt:ASUNt:H i+HAGt:H r DA'rt:: N()VCMH✓H 7h, t4H5 SIIHJF.CT: l'ON'rINCt.N('Y PLAN KPH POSKIHI.t. RtAXICTION OF 1906 SI'ATt: All)-; Recent forecasts by the Minnesota Wpartm,slat of Finance indicate a very slrony lekelihDrA that the State of Minnesota will experience a bud.p-t deficit for the htenntum endin.l ,tune 30, 1987 ds a re5ull of projected revenu.- %horltalls. The deficit has been e4limared to be bxetwe.'n $160 million - $915. Already State Ptticials and Legislators have begun to talk about cuts in the State's budget to wake up these projected deticits, tuts in aids to local jov-•rnments ha-, always come up in every discussions. Therefore, there is a very strong likelihood that our state aids will he cut, on November 8, 198% 1 attended a torum on Local Government Revenue Strw+s which discussed the Steete's revenue problems and the eltect they could have on local government. Nellie C John.:on, Ueputy Commissioner of Finance.; Tom Triplett, Commissioner of R-•v--nu.-; and Hill Sehreitw-r, Chairman of the House Tax Comiiittee, were presenteie in the State side .and Dr. Paul Hasbargen of the University nt Minnesota spoke on the agricultural outlook. As a result of attending that Forum I believe that the city could exp.-rience a 10-1S percent reduction of local government aids, or $521000-$891000. Reediting the -trauma' that accompanied a reduction in state aids in 1981-1982 T recommended to the Clerk -Administrator and Iicpartment Heads that the City take a proact've ver,us a reactive position reyarding passible reduction:; in local government aids. I proposed and they ayroed that a contingency plan outlining possible budget cuts be prepared now to be used in the event of reductions of l.xal government aids. The Clerk -Administrator and Deparrment Heads met on W)vemher 19 and 26 and developed a contingency plan. The plan addresses what we presently believe to be the -worst case scenario*; a 15% ($84,000) reduction in local govern- ment aids. Me hope that the -worst case scenario- will not be realized. Theretore, the plan is divided into three levels of budget cuts: A, R, C. Cuts ldtn-IIPd 'A' would be made firsts it necessary cuts labelled -H` would be next, ' and cuts iota -lied 'C- weld be made last. A description of and the rationale for the cuts proposed follows.