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FF-2. Economic Contributions by <br />Cities <br />Issue: Cities provide and maintain the <br />physical infrastructure as well as the social <br />and economic infrastructure necessary to <br />support a large share of the state's economic <br />activity. In addition, cities play a major role <br />in statewide economic development <br />activities that assist businesses with <br />expansion and job creation. The importance <br />of cities to the overall vitality of the state's <br />economy is frequently overlooked in state <br />policy discussions. <br />Response: To provide lawmakers with <br />information on the economic activity <br />occurring within cities, the Department of <br />Revenue should annually collect and <br />compile information on major state tax <br />collections within each city, in addition to <br />county and regional reports. <br />FF-3. State Budget Stability <br />Issue: In recent years, the Legislature has <br />faced repeated budget deficits. Legislative <br />actions to address these deficits have <br />included permanent reductions in funding to <br />local units of government for programs such <br />as local government aid as well as the full <br />elimination of programs such as the market <br />value homestead credit. In addition, the <br />Legislature has frequently relied on short- <br />term solutions that have only shifted a large <br />share of the deficit problem into the next <br />biennium. These actions merely shift state <br />budget problems to local units of <br />government without permanently addressing <br />the state budget problems. <br />The legislature has taken steps to reduce <br />state budget volatility. As required under <br />state law, 33 percent of any state general <br />fund budget surplus identified in the <br />November state budget forecast must be <br />directed to the state budget reserve until the <br />account reaches a targeted level. <br />Response: To increase the stability of the <br />state budget and avoid or reduce the <br />impact of future state budget deficits, the <br />Legislature: <br />a) Must consider all options, including <br />revenue increases, with a particular <br />focus on changes that increase state <br />revenues and improve the stability of <br />the state's revenue stream; <br />b) Must not further reduce funding for <br />property tax relief programs to cities; <br />c) Must not accelerate the remittance of <br />sales tax collections by retailers <br />including municipal liquor operations, <br />and should make steps to reverse past <br />accelerations; <br />d) Must consider the aggregate impact <br />on Minnesota taxpayers of previous <br />budget cuts and tax increases; <br />e) Must reinstate estimates of <br />inflationary increases to expenditure <br />estimates; <br />f} Should continue to build at a <br />minimum, a five -percent budget <br />reserve and should establish state <br />budget stability as a state priority. <br />This includes prioritizing state budget <br />stability ahead of sending back tax <br />rebate checks as was done in 2000; <br />Should modify the unallotment statute <br />to place a reasonable statutory limit <br />on the percentage and timing of the <br />state's budget that can be unallotted <br />during a biennium without legislative <br />approval; and <br />h) Must emphasize long-term budget <br />solutions and budget stability and the <br />continuation of both state and local <br />government operations. <br />i) The League of Minnesota Cities <br />supports the principle of <br />representative democracy and opposes <br />limiting the Legislature's flexibility in <br />g} <br />League of Minnesota Cities <br />2018 City Policies Page 103 <br />