Agenda - Council - 05/13/1980 - Laserfiche WebLink

Home

lea§we of minnesota cities EFFECT OF THE ADMINISTRATION'S PROPOSED FORMULA CHANGES The Treasury Department has calculated the changes in distribution which would result from these formula changes. These calculations were made using the EPiO data elements, and without including the proposed $500 million increase in the funding level. As you know, revenue sharing allocations among the local units of state are calculated in a two-step process: An allocation is first calculated for each county area. That allocation is then divided up among the local units. The allocations among county areas, and among local units in each county area are both made according to a formula of "Population X General Tax Effort Factor X Relative Income Factor" within the constraints described above. The "General Tax Effort Factor" (GTEF) is equai to the unit's total taxes divided by the total personal income within the unit. The "Relative Income Factor" (RIF) is equal to the state average per capita income (PCI) divided by the local PCI. Enclosed with this memo are two tables: One shows the amounts which would be allocated to each county area under the .proposed formula, compared with the current formula. The other shows the distribution among the local units of your county. The tables show the following information, from left to right: Unit Name; EPiO allocation in dollars; EPIO allocation'as a per capita amount; dollar allocation under the proposed formula; per capita allocation under the pro- posed formula; ~he difference in dollars; the percent difference; the rela- tive income factor; population; per capita income; and general tax effort factor. PT:r mm Enc. 4/21/80 300 hanover building, 480 oedar street, saint paul, minnesota 55101 [812] 222-2881