Agenda - Council - 05/12/1981 - Laserfiche WebLink

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-2- Cities need to set aside differences and unite in opposition to this new threat to local financial integrity. NEW LEVY LIMIT PROPOSAL - EXTREMELY RESTRICTIV~ 1. This new, more restrictive levy limit Would apply to all. cities - not just cities over 2,500. ~ on an_~city property tax increase. Thy ~%.limit would be 2. There would be an 8% cap In other words, applied to a new type of levy limit base - the total 1981 city e y if your city raised a total of $1,000,000 through the property tax in 1981, you would be able to raise no more than $1,080,000 in property taxes, for whatever ~, in 1982. This is very different from the current system, under ~hic~ the 8% limit is applied to a base, consisting of the combination'of local government aids and the limited levy. Under the existing system, this base is allowed to grow to reflect population increases and there'are'various "special"'j or-unlimited- - levies allowed for such purposes as bonded debt, pension costs, matching grants and court judgments. However, under the new proposal, no special levies would be allowed nor would population increases expand the base. 3. The 8% levy limit proposal would apply 'to cities, counties and towns. For compari- son, the average city levy increase for payable 1981 was 15.3%. Schools would be allowed.to raise their basic maintenance levies 27.3% and "all other" 10.5%, for a total increase of 19.9%. HOW THE LEVY LIMIT PROPOSAL WILL HURT ALL CITIE~S The League fears that in 1982 and certainly in 1983 many cities will be forced into major service and expenditure cutbacks because of an inability to raise revenues locally under the Governor's proposed levy limit. Our position is that local officials are responsible not be subject to arbitrary, across-the-board limits.. Cities aI~d'accountable, and.~ld ..... ~ ,~ th propert tax as local needs requ~. rotect their abl~lty t~ ~)e.~F .-~_-:~_-:~_~ ~,,~ ~--not make more expeno~ure ~m)EG:vernor has now a,mitteo ~nat ne, a~ ~nu ~ ,~-~-, ~ere yo? can cut no more ~cuts - "But there comes a point where you touch the nerve - without doing serious damage." His proposal does not'allow city officials the freedom to make the same Judgment.- ' SOME CITIES MAy BE PARTICULARLY HARD HI~ - 1. Cities that have been frugal and attempted to keep property taxes down will be penalized, because their new "property tax levy base" will be smaller and thus the 8% allowed increase will be less. · 2. CitTes that have incurred bonded debt and expected to begin to levy for debt service in 1982 or later will be especially hard hit. In general, city bond ratings will be threatened because of limited ability to meet any full faith and credit obligations that might arise. Any activities necessitating bonded debt would have to be curtailed. 3. Cities {hat have any "special needs" such as an increase in bonded debt, increased 'need for services because of a growing population, requirements to fund growing "pension costs, etc. - these cities will be hampered in their ability to deal respon- sibly with their unique local situation. les that have been receiving a relatively high proportion of local government 4. Cit · icularl in 1983. aids (LGA) will be especially hard hit, part Y