Agenda - Council Work Session - 12/07/2010

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1 -11 State Program Revenue Sources Metro Cities opposes any attempt by the state to finance programs of statewide value and significance with local revenue sources such as municipal utilities or property tax mechanisms.. These local revenue sources are created to finance local government services. Statewide programs, such as the Clean Water Legacy Act, serve important state goals and objectives, and should be financed through traditional state revenue sources such as the income or sales tax. I -S Post Employment Benefits Metro Cities supported 2008 statutory changes that allow local governments to establish trusts from which to fund post- employment health and life insurance benefits for public employees, with participation by cities on a strictly voluntary basis, in recognition that cities have differing local needs and circumstances. Cities should also retain the ability to determine the level of post employment benefits to be provided to employees. I -T Health Care Insurance Programs Metro Cities supports legislative efforts to control health insurance costs, but opposes actions that undermine local flexibility to manage rising insurance costs. Metro Cities encourages a full examination of the rising costs of health care. and-the impacts on city employers and employees. Metro Cities also supports a study of the fiscal impacts to both cities and retirees of pooling retirees separately from active employees. I -U State Budget Stability For the last several years, the State has experienced budget deficits and increased volatility in state revenues. To address state budget shortfalls, the Legislature and Governor have focused their efforts on reductions in expenditures, shifting of costs to other units of government, school payment-delays, and drawing the state budget reserve, Many of these options will not be available to address future state budget shortfalls and the Legislature and Governor must seek solutions that achieve structural budget balance. In 2007, the Legislature and Governor created the State Budget Trends Study Commission to study the implications of state demographic trends on the state's tax base and revenue collections, as well as trends in spending for state programs. The Commission was charged with examining the state budget with regard to budget stability and flexibility and making recommendations for state tax and budget changes that include changes in the tax base, mix of tax types, state and local finance relationships, entitlements and the budget structure. The Commission identified several major demographic and fiscal trends and recommendations to address achieving balance in state revenues and expenditures and managing state budget volatility. 2011 Legislative Policies