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I <br /> <br />I TO: Managers and Clerks . <br /> FROM: Peggy F]icker, Legi <br />m SUBJECT: Impact of tax bi;;a;L;eb:;;:;eLalanc, ng b, ll <br /> <br />m This memo will briefly highlight several important actions taken by the Governor and <br /> Legislature that might have an immediate effect on cities' actions. A more detailed <br /> summary will appear in the next Legislative Bulletin which you should receive by <br /> mid-April. <br /> <br />I <br />I <br />I <br />I <br />I <br /> <br />1) Budget cuts <br /> <br />The most recent budget-balancing bill cuts an additional $5.5 million in state pay- <br />ments to cities due in 1982. The local government aid payments are not cut further. <br />The cuts will be taken instead in the homestead credit reimbursement payments.- The <br />$5.5 million translates into a 6.3% cut in each city's 1982 reimbursement. However, <br />each city should plan on a total shortfall of 8.2%, due to the proportional cutback <br />caused by the additional school levies allowed in January. <br /> <br />These figures are based on Dept. of Revenue estimates. The Department will send <br />each city a letter next week explaining exactly how to calculate the amount to be <br />cut. No additional levy authority for 1983 has been granted to make up for any <br />of the cuts. <br /> <br />I <br />I <br />I <br />I <br />i <br /> <br />2) Municipal bond interest rates; negotiated sales <br /> <br />a. The 12% interest ceiling has been removed and replaced with a floating ceiling. <br />The rate will vary monthly according to the Bond Buyer's Index of 20 Municipals. <br />The maximum will be that rate plus one percent and rounded to the next highest <br />percent. The monthly maximum will be published each month in the State Register <br />by the Commissioner of Finance. The 12% ceiling applies to any obligations <br />authorized by resolution before May 1. The new floating rate will apply to any <br />obligations authorized by resolution after May 1. <br /> <br />b.. Effective March 23, the public sale requirement does not apply to obligations <br />sold by an issuer in an amount not exceeding the total sum of $300,000 (formerly <br />$200,000) in any three month period. <br /> <br />300 hanover building, 480 oedar, street, saint paul, minnesota 55101 <br /> <br /> (OVER) <br /> <br />(612) 222-2EIEi1 <br /> <br /> <br />