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I I I I I I I I I I no Opera ~ng ~venue Operating revenues have increased approximately 77.6% over the past four y~ars'~. Some of this increase is due to inflation, and some is due tO ~op~lation growth in the City. By far the City's largest source of oper~ating revenue is property taxes, which make up 66% of the 1981 operati~ng ~udget, and 68% of the 1982 operating budget. Property tax revenue!., haS grown by an average of 32% per year, and did not become subjec~tI to,levy limitations because the City was exempt from this law based on i~ts 1970 population. Therefore, the levy limit legislation will bell the. determining factor in projecting this revenue source for the n~x.t f~ve years. Local ~G0ve~nment Aid also makes up a significant portion of the operat- ing b~d~et~ at 16%. This revenue source has been increasing at a rate iyear although ,it appears at present that this source may of 17% ~er~ , stabilize ~nd will not continue to increase as it has in the past. a. ~Pr~vious Levy Limit Laws Th~ levy limit law for 1981 limited the growth of' the per capita ~"levy limit base" to 8% per year (6% prior to 1981). The "levy 'li~t base" was the total of the property tax levy plus the local i~goV~ernment aid. Limiting the growth of the base presumably pro- ilvi~ed a way for the State to ensure that an increase in local aid iwi~l, have the effect of reducing %he relative amount raised by ipro~erty taxes. Since it was expressed in "per capita" terms, ]the~e was some built-in allowance for growing communities because ~thei levy limit base was divided by the previous year's population !.to ~et the base per capita. This figure was then increased by .18% ~nd then was multiplied by the current or most recent popula- t~oD estimate to arrive at the levy limit base. '.~Pri~r to 1981, the increase in the per capita base was limited to ~%. During the period 1975-1980, Ramsey's population grew by :an ~verage of 7.4%. Therefore, i~ Ramsey had been subject to ilev~ limits, the levy limit base would have been allowed to in- · .crease only about 13% (6% plus 7.4%) per year. Looking at the inckease in the total of Ra~sey's local aid and property taxes ,~from 1978-1981, the average increase was 30% per year, the bulk of ~hich was made up by property taxes. Since the amount raised !by ~roperty taxes is directly related to the need for funds to provide the necessary services, the 13% increase allowed under !~levy ~imits would clearly have been ~nadequate to meet Ramsey's needs.