Agenda - Council - 01/22/1979 - Laserfiche WebLink

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b) The following is a breakout showing how the State's, Local Aid Fo~m]a is failing to serve all the cities on an equitable basis~ 1). Cities A1 through A2 are outer tier suburbs in the Metro Area and all have one thing in con,non in that they are new developing cities [e×cept City #3) that are faced with rapid growth and yeW little tax base other than residential dwellings, However~ they receive the least amount of State Local Aid.. 2) Cities AS and B1 of enclosure (!). are larger cities but both have the same thing in common as they are old cities and are well established in that they have all of their improvements in such as streets~ parks, etc, and their per capita take on local aids exceed the cities of Ai~ A2 and A3 above, 3) Cities B2, BSa C1. and C2 are smaller in size'and are older and well established in that they have all of their improvements in such as streets~ parks! etc: and their per.capita take On State Local Aid exceeds the citaes, of Ai~ 7k2 and A3, 4) The City of Monticello (.C3) shows a tax levy of $869~152 and" of that levy Northern States Power pa.ys 82% (_$712~706).. The rest of the CitY pays 18% (.$156:447)~ 3) Fmmm]a. The State's formula for distributing State Local Aid monies to Citieg in' th~ State of Minnesota as gotten from the Research of the State Revenue Department is as follows: 1~ Mill rate ~ three year average of previous mill rates to compute current .year aid formula 2] Sales rati~ ~ which is. the real estate sale (Mill rate average times sales rate) 3} 'Population average between 19.70 U.S, Census and ~urrent population projected by the State of Minnesota Accordingly the three factors carry equal weight when computing local aids to c~t~es according to tax research: 4% S~,~ary', When reviewing enclosure (_1) it is difficult to believe that curr~nt' State Local Md Formula has any justice in it. It does do one thing, It allok's fo~ communities not to be fiscal minded in budgeting their dollars as the State is going to re,yard them in a lions share for-State Aid: I~%e~eas the communities who do practice good fiscal management are going to be warded nothing fo~ their effort~ However, in developing a State Local Aid Formula which woUld be equitable tO all conmmities the legislature should establish a commission which would con-. sist .of communities outstate, Core City, intersuburbs and outer tier suhurbs as all d9'l~ave diasimilar problem. A156 it c~uld be done on a. ~trict per capita basis which m. ight not be fair to some of the smaller communities: