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ALBERT H. QUIE <br />GOVERNOR <br /> <br />~.%/TATI~; OF ]N/IINNES()WA <br /> ()I:I.'I(',E elf Till'; <br /> <br />August 15, 1980 <br /> <br />The Honorable Thomas G. Gamec <br />Mayor, City of Ramsey <br />15153 Nowthen Blvd., NW <br />Ramsey, Minnesota 55303 <br /> <br />Dear Mayor Gamec: <br /> <br />Thank you for your letter indicating your 'concern over the <br />possible reduction in local government aids. As you know, <br />the State of Minnesota has experienced a shortfall in revenues <br />at the close of F.Y. 1980 in the amount of $90 million. <br /> <br />The Minnesota constitution and State law do not permit deficit <br />financing. In the event that State revenues decline, State law <br />requires that the Commissioner of Finance reduce allotment of <br />appropriations in order to effect a balanced budget. <br /> <br />The Department of Finance is currently reviewing the revenue <br />forecast. If this review indicates that a shortfall in revenues <br />will occur for F.Y. 1981, it will be necessary to reduce allotment <br />appropriations. The size of any potential shortfall will dictate <br />the extent to which appropriations will be reduced. An announce- <br />ment will be made the week of August 18 indicating the actions <br />that State government will take. <br /> <br />In the event of a revenue shortfall, State agencies will be <br />required to reduce their budgets. If the shortfall is of such <br />magnitude that the budget reductions will be extended to local <br />government aids, it would appear that local governments would <br />also have to seriously consider reducing their budgets rather <br />than increasing the levy against property. <br /> <br />Again, thank you for your letter expressing your concerns. <br /> <br />S in~y <br /> <br />GOVERNOR <br /> <br />AN EQUAL OPPORTUNITY EMPLOYER <br /> <br /> <br />