Agenda - Council - 09/08/1980 - Laserfiche WebLink

Home

8.3% cut in state aid payments to cities? In considering this question, the League Board asked that the Commissioner not revise or reduce the 1981 certification. The Commissioner indicated that a decision on this point has not been made but will be soon. The League Board hoped that, without a reduction in certification of aid; the Legislature could review the situation in January and, possibly, restore GovernorQuie's cut. Secondly, should the "shortfall" situation improve, the cut could be reduced. The problem is as follows: If the 1981 certified amount of aid'~remain~ as issued, then cities, particularly'those up against their levy limits, would not be able ~o levy the taxes necessary to regain any funds which might be cut from the March, 1981 payment. The other side of the coin is that. if Commissioner Allen issues a r~viSed 1981~ state aid amount (cut by 8~3%),. then citie~,-in preparing their 1981 budgets, may levy for the reduced' a~oun~,' leVy 'l'imi~s'.'.-n~'t~ith~ndi'ng'~ ...... ~ ' ..... ~" .... ' ............ ... The League Board decided to be tough on this point in. order to seek'relief'in the Legisla- ture. Furthermore, if the Commissioner revises (and reduces) the 1981 payment, then no restoration can be made, either by the Legislature or by the Governor if economic con~-- tions improve. '~' ..... 3o State Cash Flow :. .t.. The state will experience a severe cash.flow problem in November of 1980. Commissioner Allen has asked that the League survey cities, as.to whether--cities could forego'receiving the November 15 state aid payment until.January 15. (A survey form .is attached.) The state does not intend to pursue this proposal on an ..across-the-board basis but will accommodate'"individual problems in order to avoid.:causing, cities to issue tax anticipation notes to help the state with its cash problem. .4°. Other'CitzAids The'League'is surveying state agencies in order to determine whether state agencies are ~ass~ng on their own cuts in program by cutting pass,throUgh'funds'to cities, in effect, giving cities additional cuts in aid. The survey is incomplete at the moment. Commissioner Allen agreed that he would work with the League when we were able to identify state cuts which would also affect cities. If you are aware of any other state program cuts, please inform the League at once. Thus far, we have identified agency cuts in the following programs: mass transit assistance, energy assistance, and IISAC grant funds. Apparently, shade tree funds and dedicated highway funds are intact. We're still checking other funds. The League will protest these cuts and seek relief from what may amount to a double cut. 5o Follow-up. city Witnesses shared their problems with the cuts with the House Taxes Committee on August 28 and others will testify at a Senate Finance Committee hearing on September 11. Please complete and return the enclosed survey to the League by September 8. DAS:kgj