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I <br />I <br />I <br />I <br /> <br />I <br />I <br /> <br />I <br />I <br /> <br />i <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />To provide an ~ncent~ve for replacement of aging capital <br />facilities. <br /> <br />To resolve "special" fiscal problems, i.e. local pensions. <br /> <br />(Plaintiff's "Answers to Interrogatories," Answer No. 3) <br /> <br /> 4. (a) The varioos provisions of the law wbicb permeate.tbe <br />calcolations of the formola achieve an effective "grandfathering" <br />of the amount of LGA granted to the amounts granted in prior years <br />and onder prior laws. This radically interferes With the <br />application of the formolas to soch a degree that oor studies <br />indicate that there is no rational relationsbip between the LGA <br />cities receive and the amount of property taxes levied. The table <br />presented on the following page summarizes the magnitode of the <br />effect of tbe grandfather provisions on the cities incloded in our <br />study. <br /> <br /> (b) Based opon our studies, the effect of the grandfather <br />provision in tbe law upon estimated distribotion for 19841 is <br /> 2 <br />generally as strong as it was for any of the previous years. <br /> <br />The most significant factor in determining a levy limit city or <br />town's estimated LGA allocation for 1984 is the amount of LGA <br /> <br />received in the prior year. <br /> <br />1Estimated by the Department of Revenue and provided to us under a <br />memorandum dated June 30, 1983. <br /> <br />2Correlation analysis performed by os ir~dicate that there is an <br />extremely strong positive relationship (coefficient correlation of <br />99.97%) between the estimated LGA allocated to soch c~ties for 1984 <br />and the LGA allocated in 1983. <br /> <br />- 4 - <br /> <br /> <br />