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

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6) When levy limit cities and towns are identified as either "high fiscal 'i capacity" or "low fiscal capacity" on the basis of their 1978 adjusted assessed values per capita, there is no apparent shift in the percentage distribution of aid from one group to the other when either the funding level, the rate of inflation or the minimum and maximum state aid factor increase schedules and brackets are allowed to vary. This is contrary to the expectations, since it was expected that the "low fiscal capacity" cities and towns would benefit from an increase in the rate of inflation. This absense of shifting may be due to the fact that "low fiscal capacity" and "high fiscal capacity" cities and towns are not very different in terms of the proportion of cities and towns receiving their aid on the basis of their minimum as opposed to their preliminary or maximum state aid factors. 7) When levy limit cities and towns are identified as either "high tax effort" or "low tax effort" cities and towns on the basis of their average equalized mill rates, modest shifts in the percentage distribution of aid between the two groups occurs. It appears that when the minimum and maximum state aid factor increases schedules and brackets are allowed to vary, an increase in the schedules and brackets benefit the "low tax effort" group the most. This can be explained by the fact that most cities and towns receive their aid increases on the basis of their minimum state aid factors, and by the fact that most of the "low tax effort" cities and towns have their aid increases based on their minimum state aid factors while most of the cities and towns that have their aid increases based on their preliminary or maximum state aid factors are "high tax effort" cities and towns. For this reason, changes in the minimum and maximum state aid factor increase schedules and brackets primarily benefit the "low tax effort" cities and towns. 6 i P-J 1�1