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CCP 12-17-2001
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CCP 12-17-2001
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<br />PAC Conference, continued from page 1 <br /> <br />. <br /> <br />Conunissioner Wheelock con- <br />cluded her corrunents by saying that <br />\vith such a large percentage of the <br />state's budget concentrated on <br />transfers to other units of government, <br />the governor has everything "on the <br />table" as they begin to identifY solu- <br />tions to the state's budget shortfall. <br />With the acknowledgement by <br />Commissioner \Vheelock that the <br />December state budget forecast could <br />show a substantial deficit and that all <br />areas of state spending will be re- <br />viewed, city aid programs will almost <br />certainly be part of budget-balancing <br />discussions. Between now and the <br />end of the current state biennium, <br />there are three remaining state aid <br />payments to cities. <br />1'his Dec:emhees aid payments <br />would not likelv be affected by any <br />budget balancing actions. However, <br />the July and December aid payments <br />due in 2002 could be affected. This <br />presents a challenge given that cities <br />are currently crafting 2002 budgets <br />based on the 2002 aid notices distrib- <br />uted by the Department of Revenue <br />this past July. If aid payments are <br />reduced by legislative action after the <br />final property tax levies are certified <br />this December, cities will have little <br />choice but to cut spending, draw <br />down reserves or borrow money on <br />a short-term basis. City officials may <br />. want to consider these potential <br />implications as they set final levies <br />and adopt their budgets this full. <br />While the i-ainy day fund will <br />help the state address any future <br /> <br />budge, shortfall and potentially reduce <br />the need for budget cuts, Canmus- <br />sianer Wheelock also said that these <br />resources might not be sufficient to <br />prevent budget cuts this neAl session. <br />Despite that prediction, Wheelock <br />pointed out that few states are in as <br />good financial shape as !v1innesota. <br />The morning session also in- <br />cluded a presentation by Department <br />of Revenue Commissioner Matt <br />Smith, one of the chief architects <br />of the 2001 property tax reforms <br />package. His comments focused on <br />the objectives of property tax reform, <br />including the goal of making the <br />property tax a smaller tax, a simpler <br />tax, and a more local tax. <br />Conunissioner Smith indicated <br />that under the 2001 reforms, the <br />property tax would be smaller due to <br />the state takeover of general education <br />property tax levies. According to <br />Smith, the 2001 tax reforms will <br />make the property ta:, system simpler <br />and more understandable by reducing <br />and compressing the number of <br />property classifications. He suggested <br />that in the future, the property tax <br />will be more local and more account- <br />able due to the fact that the level of <br />property taxes will be more closely <br />aligned with the decisions of city and <br />county elected officials. <br />Smith went on to summarize the <br />preliminary estimates of tax relief due <br />to the inter.lction of the 2001 prop- <br />erty ta..'\: reforms and the 2002 <br />property taxes proposed by cities, <br />counties, and school districts. Smith <br /> <br />indicated that of the $176 million in <br />new school referendum requests <br />that were on the November 6 ballot, <br />only about $64 million was actually <br />approved by voters, mostly in Grea[er <br />Minnesota. <br />For cities, Smith said that based <br />on the September 15 preliminary <br />property tax levies, 125, or 60 per- <br />cent, of the cities affected by levy <br />limits had proposed levies up to the <br />levy limit. For all cities, the Revenue <br />Department's analysis indicates the <br />ovetall proposed city levy increase <br />for 2002 was 17.1 percent, which <br />includes the levy increase in many <br />cities for the loss of state aids. <br />In total, Smith said that total <br />property taxes will be $443 million <br />lower in 2002, which is $220 million <br />less relief than was estimated at the <br />end of the legislative session. Despite <br />this reduction in the amount of tax <br />relief, he suggested that virtually <br />all types of property will see a tax <br />reduction in 2002. <br />Smith concluded his comments <br />by looking ahead to state/city tax <br />policy issues that must still be ad- <br />dressed. Commissioner Smith told <br />attendees that we will likely revisit <br />the appropriate role of the state in <br />supporting local services and issues <br />related to the flexibility and au- <br />tonomy oflocal government finance <br />in Minnesota. <br />For an overview of other issues <br />discussed at the 2001 Policy Adoption <br />Conference, see pages S-6. t' <br /> <br />e <br /> <br />e <br /> <br />YOUR CITY NEEDS A STATE-OF-THE-ART WEB SITE AT A COST YOU CAN AFFORD <br /> <br />GovOffice Webcreator-Created for cities, by cities <br /> <br />Your city government wants to build a web site to communicate with citizens, explain city services <br />and efforts, and encourage community feedback and involvement. Where do you begin? <br /> <br />.. GovOffice Webcreator-a new service from the League of Minnesota Cities <br />N in cooperation with Avenet, ICMA, and Microsoft-can hdp. <br /> <br />go FOR ADDITIONAL DETAILS AND PURCHASING INFORMATION: <br />~ Contact Tyler at Avenet. toll-free (877) 564-4979 or e-mail: info@govoffice.com <br />. Visit the GovOffice web site (www.goyoffice.com) or the LMC web site (www.lmnc.org) <br /> <br />e <br /> <br />November 21, 2001 <br /> <br />Page 3 <br />
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