Agenda - Council - 09/30/1980 - Special

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September 15, 1980 TO: FROM' RE: All City Mayors, Administrators, Managers and Clerks Donald A. Slater, Executive Director Delays in Payment and Reductions of Local Government Aid Commissioner of Revenu~Clyde Allen, today announced Governor Quie's final decisons regarding cuts in state aid and deferral of payments to local governments. Despite the state's intention to borrow $100 million, the November cash flow crunch is going to require delays in both local government aid and homestead credit payments. .And the currently projected deficit of $195 million is resulting in cuts to local government aids. League staff members met with Commissioner Allen and came away with the following information concerning the cuts and delays. Timin9 of 1980 Local Governme. nt Aid pasments Sept. 15 - payment being made on time and in full. Nov. 15 - payment will be deferred until December 31, at which time payment will be made in full. Payment maS be made prior to December 31,-cash flow permitting. It will not be made any later than December 31. Note to cities using cash-flow accounting system: Commissioner Allen was willing to try to accomodate cash-basis cities to assure that the December 31 payment is actually received by that date. Cu~ in March 15, 1981 Payment The currently scheduled March 15 payment will be cut by 30.755%. (This reflects the 8.3% cut in the state's current fiscal year, and is the only cut expected during the state's current fiscal year.) Delay in Payment of Regular Homestead Credit (Note: no cuts, just deferral) 1. 52.9% of the November 15, 1980 Homestead Credit payment will be paid. (To determine the amount to expect, calculate 52.9% of the July, 1980 payment.) 2. On December 15, 1980 the remainder of the Homestead Credit will be paid. (OVER) 300 hanover building, 480 oedar street, saint paul, minnesota 55101 (612] 222-2861