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I <br />I <br />I <br />I <br /> <br /> I <br />I <br />I <br />I <br />I <br /> <br />I <br />I <br />I <br />I <br />! <br />I <br />I <br />I <br />I <br /> <br />The new law provides for a local §overnment aid reduction penalty for any <br />city whose total levies less any special levies is greater than its levy <br />limitation. The penalty is 33% of the amount of the excess levy. For <br />example, an excess levy of $10,000 results in an aid reduction penalty of <br />$3,300. The severity of this penalty makes it very important that your <br />city's total levy less any special levies does not exceed its levy limit <br />as shown on line 6 of the enclosed notice. <br /> <br />The amount of local government aid that your city will receive in 1982 is <br />shown on the enclosed notice. The amount is shown on line 7. <br /> <br />The new levy limitation law also has a provision that restricts the amount of <br />a city's levy that is eligible to receive the homestead credit aid. The <br />maximum amount of a city'slevy that can receive the homestead credit is <br />determined as follows. The city's total payable 1981 levi< is increased by the <br />percentage increase in the number of homesteads in theC~ty between 1980 and <br />1981. No adjustment is made where there was no change or where there was a <br />decrease in the number of homesteads. The amount determined by this calculation <br />is then increased by 8%. This is the maximum levy which can receive the home- <br />stead credit. For your city, this amount is shown on line 9 of the enclosed <br />noti ce. ~ <br /> <br />If the total payable 1982 levy (including special levies) for your city is less <br />than the amount shown on line 9, then the homestead credit will be based on <br />your city's total levy. If the total payable 1982 levy for your city is <br />greater than the amount shown on line 9, then the homestead credit will be <br />based on the amount shown on line 9. If your city's homestead credit is based <br />on the amount shown on Tine 9, the city will still receive the amount of its <br />total levy from local taxes'and the homestead credit but the levy in excess of <br />the amount on line 9 will be paid entirely by the taxpayers in yourcity. None <br />of the excess will be paid as homestead credit aid. ~. <br /> <br />If you have any questions.regarding this letter, please contact me. <br /> <br />Very truly yours, <br /> <br />Wallace O. Dahl, Director <br />Local Government Aids and Analysis Division <br /> <br />Enclosure <br />WOD:js <br /> <br /> <br />