Agenda - Council - 12/20/1983 - Laserfiche WebLink

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I I I I ! I I I I I Because plaintiffs' challenge is premised on the equal protection clause, it is useful for purposes of analysis to view the fundamental elements of the local government aid formula as establishing "classifications" on the basis of which some cities are discriminated against in that they receive less local government aid than other cities. Thus, cities are "classified" based on: 1) fiscal need; 2) fiscal capacity; 3) preliminary aid factor; and 4) maximum aid increase and reduction levels. As demonstrated in the following pages, each element, or classification, has a rational basis supporting its use, and is, therefore, constitutionally sound. A. The Local Revenue Base Is a Rational Measurement of Fiscal Need. The first_____ major element.____ used by the formula in calculating the aid to which a city is entitled is the loca____l rev~e~n~ue base. Generally speaking, a city's local revenue base is the .p_r_9~ ta__x levied by the city in a recent year plus the local qove~nment aid received by the city in that year,, adjusted for inflation and changes in the city's population.27/ The local revenue base represents the legislature's estimate of a city's fiscal need. It attempts to measure the amount of revenue a city would need to raise through property taxes absent the availability of general revenues from the state. Quite logically, it calculates this amount by reference to the amount of revenue raised in a recent year by property tax levy supplemented by the local government aid received, 27/ See pp. 11-12, supra, for a more detailed explanation.