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LOCAL GOVERNMENT AID (LGA) Background Local government aid was originally established in 1971 as a per capita revenue sharing/property tax relief program that initially replaced thc exempt property reimbursement program~ and the-sales-tax-per capital aids:' In 'I973 eifils' lost other miscellaneous revenues, including cigarette and liquor tax aids, the bank excise tax aids, the reilriad and telephone gross earnings tax aids, the mortgage registry tax aids and the inheritance tas aids. In conjunciton with these lost revenues, the LGA program was expanded. Since the LGA program was created, the formula has been amended and changed frequently. The 1993 Legislature enacted an entirely new formula that distributes aid increases to cities based on relative ci~ "need" and tax base. Cities with higher "needs" or lower tax bases will receive moreLGA than other property wealthy or low need cities. Currently, most cities receive a distribution from the LGA formula. However, several cities receive no LGA due to extremely strong local tax bases or a combination of other factors including a shift of nearly $100 million in state aid to cities to school districts that occurred in 1990. LGA payments are made to lozaJ units of government in two equal installments, on or around July 20 ahd December 26 each year. Notification and Levy Certification By August 1 of each year, fl~e cowa:nissioner of revenue notifies each city of its LGA distribution for the following year. This notification includes the data and factors used to compute the LGA distribution. Cities have 60 days to appeal the calculation or factors used in the computation. The LGA notification is intended to be used in the budget settit:g process by city officials. LGA is a general revenue sharing distribution that can be considered a seperate revenue source for all cities. The following graph indicates the levels of LGA that the City of Ramsey has received from t989 through 1993 and the certified amount for 1994.