Agenda - Council - 05/27/1980 - Laserfiche WebLink

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budgets. Since, in most instances, these funds are a part of the city's operating budget, reductions in general revenue sharing will leave cities no choice but to raise taxes or reduce city services and per- sonnel. Neither alternative is an acceptable method of dealing with inflation. General revenue sharing has actually diminished in purchasing power by 40% since enactment, and has not contributed to inflation. The League, therefore requests that federal budget consideration, particularly as it affects city governments and the general revenue sharing program, recognize the importance of the general revenue sharing program to our cities. It requests that this program be given priority and, insofar as possible, protected from reductions. The League further requests that the National League of Cities review the federal budgetary situation and arrive at a more comprehensive position with respect to a program to combat inflation, recognizing the view that the general revenue sharing program should be given highest priority consideration. Levy limits The fact that the legislature finds it necessary to change the levy limit law every two years is the best single example of the inherent difficulty of applying statewide solutions to diverse local problems. The levy limit law is too inflexible_ to accommodate both the high rate of inflation and the diverse problems and circumstances faced by cities throughout the state. The levy limit law is basically inconsistent with a long history of local self-government. of federal and state-mandated programs, which substitute the judgments of Con- gress and the legislature for local budget priorities, since they must be paid for within the current restrictive limits. Since special bills to address this problem on an ad hoc basis will not provide a permanent or statewide solution to these problems, the following four-step program is sug- gested: a. As an alternative to special levies, the state should provide full or partial reimbursement directly from state reven- ues to carry out state-mandated pro- grams. b. The special levy for new and increased state-mandated program costs should be reinstated; and a special levy for in- creased costs caused by federally man- dated programs should be initiated. c. The state should adopt a policy of "deliberate restraint" on its mandated programs, including a mandatory fiscal note identifying local governmental costs on any new mandated programs when they are introduced in the legis- lature and a statement of compelling statewide interest to accompany all state mandates. d. A special levy for natural disasters and lawful orders (including the cost of complying with any federal law or regulation issued after 1971) should be included. The League remains strongly opposed in principle to such limitations and advocates their repeal. If repeal cannot be accom- plished, the League supports the following amendments to the present levy limit law. The present 8 percent annual increase or 6% in the case of first class cities in the per capita limitation is unrealistic in view of the rising costs for local services. Therefore, a more accurate index of governmental costs should be incorporated into the law as a basis for automatically adjusting levy limits when local governmental costs increase more than 6 percent. One of the most serious problems facing cities is the growth in the number and cost In both 1973 and 1975, amendments were passed to the levy limit law excluding certain cities from this law on the basis of population, because it became obvious that the normal political forces at work in smaller cities made levy limits unnec- essary. The League believes this is a rea- sonable way to proceed and that the law should be amended to exclude ail cities under 5,000 population from levy limits. Local government aid formula The 1979 Legislature is commended for passage of the League local government aid formula which removed many of the inequities of the old aid for- mula. However, the distribution of state-raised revenui~ through the local government aid formula should be increased in amounts sufficient to corn- -2-