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<br />MI:Mo TO: Clerk- ldminl,trator Pauley
<br />FROM: Finan, Director -Treasurer Braflur�!/�
<br />DATE: .lane.., i 30, 1486
<br />RE: GOVEHfnIR'3 I1110GET PROPOSAL AND THE rlI'r'S CUN•1'1NGENC'
<br />PLAN I IR RF:nuCTION Or 1986 STATE AIDS
<br />An Action Alert 1. .,,1 thu Leaque of Mlnnvsola fill,••. ,lal ^I .Lu nlai
<br />23, 1986 indicates that the Governor's proposal for dealing with
<br />a predicted State reve^uo shortfall of $720,U00,00I) in part call
<br />for a reduction nt 1986 Local Government Aid of apprn,xuma nrly
<br />8.01 percent and reduction of 8.7? percent in the Homestead
<br />Credit. The City' certified 1986 Local Government Aid is
<br />$545,956. An 8.01 percent redurrion would amount r.l $44,222.
<br />The amount of 11,unn .lead Credit Ihar .1 city will 1...�Iv' i•.
<br />difficult to estim Its. When preparing General Fun! Hvv.rnuv
<br />estimates I know Ihat th,e General Fund property tax levy will
<br />equal Iho mit .11 \1010, rnrr.•nl Ad V.Ilorr•w I ,I,••. I.I'V:
<br />Account 3315, Home .teed credit. The Ramsey County iA po, tnare,I ,11
<br />Property Taxation calculates the Homestead Credit for eligihle
<br />properties within rile City of Mounds View in January after the
<br />property tax levy has boon certlFied to the runty I,w
<br />collector. I recently called the Ramsey County Unparlment of
<br />Property Taxation .Ind loarned that the General Fun,!'s portion of
<br />-he Homestead Credit will be $215,813 versus the $2(j6,935 which
<br />was originally ow1'leted. This mean; tnat the Homestead Credit
<br />was overestimated .Ind the Current Ad 'Valorem Taxes account was
<br />underestimated by the amount that the Homestead Credit was over-
<br />estimated. Rememl•r that the sum of the two accounts equals the
<br />total 1986 General Fund's share of the property tax levy. Thus,
<br />a reduction of thc Homestead Credit by 8.78 percent oquals
<br />$18,950. The total reduction of State Aids pursuant to Chu
<br />Governor's budget ,)roposal is:
<br />Local Government Aids $44,222
<br />Homestead Credit Aide 18,950
<br />Total Reductions Per Governor's
<br />Bud,let Proposali72
<br />The Contingency Plan for possible reductions of 1986 State Aids
<br />adopted by the Council and outlined in my rlovember 26, 1985
<br />memorandum provided for the use of 530,000 of Revenue Sharing
<br />allotments to offs. -It reductions of State Aids. Bae:vd upon
<br />a Revenue Sharing Recipient Accr,unt Statement received January
<br />29, 1985 and takin•I into account a possible redurrlon of Revenue
<br />Sharing because of Gramm-Rudman deficit reduction loll!slation, a
<br />outlined in a Lea-lue of Minnesota Action Alert dat,+d January 10,
<br />1986, 1 estimate that the amount. of Revenue Sharing Funds the
<br />City will receive during 1986 will amount to $30,145. This
<br />amount is $8,165 ireator than the $30,000 anticipat-ld at the tim•
<br />the Contingency plan wa•• prepari•d. Accnrdim,ly, total resources
<br />availahle for fun:• ,I,le Ite Ai : redtirti-ml'. ,re 111-w ':'I 1, If)? or
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