Agenda - Council - 08/27/1985 - Laserfiche WebLink

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league of minnesota citiE 1 0: Mayors, Managers, and Clerks OM: Donald A. Slater, Executive Director and Ann Higgins, Staff Associate E: Key Issues for Cities Result from Federal Budget Pact 1 Security and Med to and Local [ ongressional action late Thursday night, enacting a FFY '86 - '88 Budget agreement, adds some new costs and requirements that will affect all cities. Key among them is the requirement that all state and local employees be covered by Social Security, eginning January 1, 1986. While other direct spending for programs benefitting cities ncreased over reductions proposed earlier this summer, mandatory coverage for current public employees and new hires provides $1.7 billion in additional revenue to the U.S _Treasury and results in increased employer costs to cities (and other state and local R, i t f The actual budget resolution requires only that $1.7 billion be raised, leaving to the I tax- writing committees the actual decision regarding increased mandatory social security and medicare coverage for state and local employees. It is evident, however, that House - Senate budget conferees assumed that mandatory social security and medicare I coverage would be approved by standing committees following the adoption of the budget resolution by both bodies. Further examination of mandatory coverage will be necessary to determine the full extent of costs to local government. State and local employees belonging to the Basic Public Employees Retirement Association do not currently have such coverage. Their costs and those of employers will have to be determined as will the outcome of labor negotiations in order to determine costs. Full Funding of General Revenue Sharing in FFY "86 I Just two weeks ago, the House voted to support a budget resolution that would have reduced General Revenue Sharing (GRS) by 25 percent, beginning October 1, 1986. In 1 final Congressional action on the House - Senate budget conference committees resolution, GRS came out a winner! The final agreement restored GRS to full funding for FFY 1 86 with termination scheduled for October 1, 1986 (the date at which GRS is schedule for reauthorization if the program is to be continued at all). The budget agreement provides $4.6 million to GRS instead of the $3.45 supported earlier by the House and assists many Minnesota cities working to adopt '86 budgets this fall. ' -over- ' -? university avenue east, st. paul. minnesota 551 01 (61 2) 2 27 -5600 4 ; 1 l ugust 6, 1985