Agenda - Council - 12/16/1980 - Laserfiche WebLink

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DISPARI~ ~ACTOR NO. 1 The Department of Revenue publication "Local Government Aid Summary" statement as to objective is in error, even though the original legislative intent was initially correctly stated. The statement is "THE INTENT OF LOCAL GOVERNMENT AID IS TO PROVIDE PROPERTY TAX RELIEF FOR ALL PROPERTY TAXPAYERS". The distributions are made without regard to a fair or similar distribution as among taxpayers, but a~e distributed on_~ city by cit~ basis without regard as to equmty among taxpaye~ or equity among cities. DiSPARIT~f FACTOR NO. 2 The multi-pot system of calculating the distributions caused widely varying results as among the cities of the State. Mathematical distortions, which were unintended by the legislature caused major mai-distributions among the cities of the State. Officials of the I~LOSC illustrated this in t979 by transferring~- the high per capita aid city, for calculation purposes, into each of Several-other counties for that year. In its own county, that city received $220 per capita. Being placed=in each-°f~-w° other_J counties, it would have received $89.17 per capita in one and - $50.88 in the other. Conversely, Iow aid cities could be benefitted upward by being transferred into other counties. Because the current'distributions have as a base the old multi- pot calculations~ there is major need for rev-i~fon of__that base. DISPARITY FACTOR NO.''3 ".' of the current distributions are unwise a~d The "Grandfather" provl~m0ns . = ~ e+~o and should not be contznueo. unhealthy for the fiscal sounoness oz ~= ..... Under the "Grandfather" system, in effect since the start of the distributions of LGA, no city can receive less than~the distributioz the riot year,' regardless of other factors. Thus~a highly of ~P ...... +lo, aY tax increase for one yeJr provmded highly unusua£ o~ ~F~ beneficial results for all subsequent years. The "Grandfather" system should be eliminated or phased out in a limited number of years.