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April 23, 1993 To: Steve Sarkozy City Manager From* Ed Burrell City Manager Raw Local t Trust You had asked for a brief background summary regarding the at- tached memo from the LMC . LGA - Local Government Aid (Roseville receives -0-) BACA- Romestead.Agriculture Credit Aid (Roseville received $1,600,000 in 1992 and $1,700,000 in 1993 i Generally speaking, out-state c i ties -receive the majority of the LGA and suburban connuni t i es receive mo s t of the HACA . In 1991, the State Legislature passed an additional 12 cent sales tax increase. However they structured the increase Aso that local. governments (cities and counties) - were required to approve it. Any, local government who did not approve the 1/2 cent in- crease, would he severely limited as to the amount of state 'aid they would receive. It was not only agreed upon but placed into current law that the 1/2 cent would create a Local Government Trust Fund, which would essentially be dedicated to funding state ail (HACA and LGA) to cities and counties. The risk of . the cities would be that the amount of the trust fund would rise or fall with the amount generated by the 1/2 cent. You may recall that there was a greater increase in the amount generated in 1992 resulting in somewhat of a windfall for LGA cities. Regardless, it was hoped that such a Trust Fund would permit cities to avoid the annual negotiation with and lobbying of the legislature. The concern throughout 1992 by local move rnmen i s was that the legislature could backtrack and take the Trust fund away. As a result, a strong movement took place among Minnesota cities in