Agenda - Council - 07/28/1981 - Laserfiche WebLink

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I SUMMARY OF FINDINGS AND CONCLUSIONS 1) The preliminary state aid factor is relatively unimportant as the basis for determining a levy limit city or town's Local Government Aid. For most cities and towns it serves only to determine which of the two limits, the minimum or the maximum state aid factor, will be used to calculate the city or town's Local Government Aid increase. This means that the new Local Government Aid formula is not really sensitive to a city or town's local revenue base and its adjusted assessed value. This is contrary to the apparent intent of the formula since the emphasis of the formula is on the preliminary state aid factor, which is the city or town's local revenue basis minus ten mills times its adjusted assessed value. 2) Given the assumptions that were used to project Local Government Aid distributions from 1981 out to 1990, there is a very high correlation between the 1980 through 1990 distributions under the new formula and the 1979 distribution under the old formula. This very high consistency in the relative distribution of Local Government Aid under the new formula with the 1979 Local Government Aid distribution suggests that the relative distribution for 1979 is locked into the new formula. The 1980 through 1990 distributions can then be seen as mirror images of the 1979 distribution, magnified by the increasing dollars involved. This "very high consistency in the relative distribution of Local Government Aid over a ten year period can be explained by several things. First, the new Local Government Aid formula does not distribute the total Local Government Aid paid to the levy limit cities and towns. Rather, it distributes the increases in aid available to these cities and towns over the total amount they received in the preceding year. Since a 1