Agenda - Council - 02/08/2021 - Laserfiche WebLink

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FF-2. Economic Contributions by Cities Issue: Cities provide and maintain the physical infrastructure as well as the social and economic infrastructure necessary to support a large share of the state's economic activity. In addition, cities play a major role in statewide economic development activities that assist businesses with expansion and job creation. The importance of cities to the overall vitality of the state's economy is frequently overlooked in state policy discussions. Response: To provide lawmakers with information on the economic activity occurring within cities, the Department of Revenue should annually collect and compile information on major state tax collections within each city, in addition to county and regional reports. FF-3. State Budget Stability Issue: Legislative actions to address past state budget deficits have included permanent reductions in funding to local units of government for programs such as local government aid as well as the full elimination of programs such as the market value homestead credit. In addition, the Legislature has frequently relied on short- term solutions that have only shifted a large share of the deficit problem into the next biennium without permanently addressing the state budget problems. The legislature has taken steps to reduce state budget volatility. As required under state law, 33 percent of any state general fund budget surplus identified in the November state budget forecast must be directed to the state budget reserve until the account reaches a targeted level. 131 Response: To increase the stability of the state budget and avoid or reduce the impact of future state budget deficits, the Legislature: a) Must consider all budget stabilizing options, including revenue increases, with a particular focus on changes that improve the stability of the state's revenue stream; b) Must not further reduce funding for property tax relief programs to cities and taxpayers; c) Must not accelerate the remittance of sales tax collections by retailers including municipal liquor operations, and should make steps to reverse past accelerations; d) Must consider the aggregate impact on Minnesota taxpayers of previous budget cuts and tax increases; e) Must reinstate estimates of inflationary increases to expenditure estimates; f) Should continue to build at a minimum, a five -percent budget reserve and should establish state budget stability as a state priority.; Should modify the unallotment statute to place a reasonable statutory limit on the percentage and timing of the state's budget that can be unallotted during a biennium without legislative approval; and h) Must emphasize long-term budget solutions and budget stability and the continuation of both state and local government operations. i) The League of Minnesota Cities supports the principle of representative democracy and opposes limiting the Legislature's flexibility in making financial decisions through new Constitutional amendments. g)