CCP 01-03-1995 - Laserfiche WebLink

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- - - -- IMPROVING FISCAL FUTURES I Local Government Aid future city HAC A distributions. FF -1. . Problem: Despite the 1991 dedication of FF-3. Transfers of LGA/HACA sales tax revenue to the Local Government to Schools . Trust Fund, subsequem legislative actions substantially reduced the revenue available Problem: Past shifts of city LGA and . for increases in city property tax relief HACA to schools provided only imaginary programs such as LGA and HACA. relief from rapidly rising school property Although the LGA inflation index taxes. Any additional shift of city LGA . established by the 1994 legislature will and HACA will likely have a similar ensure modest growth in the LGA impact on future school property taxes. appropriation, it will only maintain the Also, new shifts will increase the tax rate . program at a constant dollar level. This disparities between cities and townships will not reverse the trend toward increased and irreparably damage the equalization city reliance on the property tax and rapid benefit of LGA and HACA. . property tax growth. Solution: Any increase in the state's Solution: The implicit price deflator share of school revenues should come ., index should continue to be used to from sources other than further maintain LGA at a constant, inflation- transfers from city property tax relief adjusted level. In addition, lawmakers programs. . should provide additional state resources for further increases in LGA to reverse the rapid growth in the FF-4. Levy Limits . reliance on the property tax. Problem: In the past, levy limits have FF-2_ HACA Growth proven to be an ineffective and inefficient . way to limit property tax growth. Control of property taxes through the local budget Problem: Homestead and Agricultural process and taxation hearings provides a . Credit Aid for cities does not increase as more effective method of oversight. the number of benefited properties increases. As a result, property tax relief Solution: Levy limits should not be . for new parcels is actually provided by imposed on city property tax~s. shifting taxes to other property owners. In . addition, the property tax relief provided through HAC A is not adjusted to keep FF-S. Levies on Market Value pace with inflation. . Solution: The household growth Problem: Applying new referenda levies to market value, rather than tax capacity, .- adjustment should be reinstated and an shifts the burden of these property taxes to inflationary adjustment similar to the homestead properties. LGA index should be established for . 16 League of Minnesota Cities ----