Agenda Packets - 1988/07/11 - Laserfiche WebLink

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MAYOR AND CITY COUNCIL PAGE THREE JUNE 29, 1988 i. Levy to reimburse the state for the cost of a reassessment ordered by the Department of Revenue. j. Debt service on Tax increment Financing Revenue Bonds to the extent that the revenues are insufficient to pay the bonds or to maintain reserves for the bonds. Beginning with taxes payable in 1989 property tax levies must be certifi«d to the county auditor on or before October 25th. Homestead Credit Homestead Credit will be retained for taxes payable 1989 with an increase in the maximum allowance from $700 to $725 per homestead. Beginning in 1990 homestead credit will be replaced by "transition aid" which will roughly equal what was received by the local unit as homestead credit in 1989 minus 38. For 1991 and beyond, transition aid will continue to be paid to local units, but frozen at its 1990 level. Homestead credit will continue to be shown on property tax statements, even though it is eliminated beginning in 1990. Local Government Aid (LGA) The LGA formula for 1989 and beyond has been drastically changed from the past formula and has, in the opinion these authors, become more complicated. Suffice it to say that there are now three steps used in determining the amount of LGA to be received by a city. The basic LGA formula determines the level of aid as being equal to $160 plus the product of $150 multiplied by the base 10 logarithm of the city's most recent household estimate with the logarithm. reduced by 1. The law provides for a minimum increase of 28 of the 1988 LGA and a maximum of 99 of the combined 1988 levy and LGA or the lesser of 20% of the 1988 levy or initial aid amount. For cities over 2,500 in population and generally having a below average tax capacity ($1,900 per household is average), an alternative LGA Formula is used. The formula used in determining the amount of alternative LGA and amount of funds distributed state-wide is shown on Exhibit D. As shown on Exhibit E, the City of Mounds View will receive a $229,541 or 40.33% increase in LGA using the Alternative Formula ($71,883 more than with the basic formula) for a total 1989 LGA allocation of $798,687. The third LGA formula is an add -on to the base LGA a city receives as a result of one of the first two formulas. This is called Disparity Reduction Aid and is provided mainly to areas where total mill rates exceed 128 mills excluding mills due to