Agenda - Council - 01/24/2017 - Laserfiche WebLink

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4. Fiscal Disparities and Local Government Aid (LGA) ISSUE: Chief Authored by former Anoka State Legislator, Charles R. Weaver, the Twin Cities Area Fiscal Disparities Program, enacted in 1971,was created for the purposes of: 1. providing a way for local governments to share in the resources generated by the growth of the metropolitan area without removing existing resources; 2. promoting orderly development of the region by reducing the impact of fiscal considerations on the location of business and infrastructure; 3. establishing incentives for all parts of the area to work for the growth of the area as a whole; 4. helping communities at various stages of development; and 5. encouraging protection of the environment by reducing the impact of fiscal considerations to ensure protection of parks,open space, and wetlands. Fiscal Disparities affects cities, counties, special taxing districts, and school districts within the seven-county metro area. It has reduced tax base disparity throughout the seven-county metropolitan area to a level of 3- to-1 (instead of the previous 10-to-1). Historically, the City of Ramsey (and Anoka County) have been a net recipients of fiscal disparities funding. Meaning,the amount of dollars Ramsey receives from the program is greater than the dollars Ramsey contributes to the program (about 1.63 factor in 2014 for Ramsey). Local Government Aid for Ramsey has fluctuated (see chart below) from a high of$396,382 in 2001, to the current level of$0 in 2017. The basic formula was changed in 2014 and some level of LGA was restored for the next three years(approximately$100,000 per year), however the same formula has now resulted in the elimination of all LGA for Ramsey and similar developing suburbs. FY 2000 -$359,771 FY 2001 -$396,382 FY 2002 -$303,894 FY 2003 through 2013 -$0 FY 2014-$91,381 FY 2015 -$110,352 FY 2016 -$111,311 FY 2017 -$0 RECOMMENDATION: Any future legislation that would modify or impact the Fiscal Disparities program should only be considered within a framework of comprehensive reform efforts of the State's property tax, aids and credits system.Any proposed legislation that would modify or impact the Fiscal Disparities program must be evaluated utilizing the criteria of fairness, equity, stability, transparency and coherence in the treatment of cities and taxpayers across the metropolitan region, and must continue to serve the program's intended purposes. The Ramsey City Council is in support of the Fiscal Disparities program. The Ramsey City Council opposes future diversion from the Fiscal Disparities Program to fund programs or projects that would contradict the purpose of the program. The City does not support efforts to exempt Ramsey (or Anoka County) from any future Fiscal Disparity program amendment discussions. I:\Legislative Platforms\2017\2017 Legislative Initiatives 011817.docx 5of12