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ExecutiveSummary:StudyoftheMetropolitanAreaFiscalDisparitiesProgram <br />FortheMinnesotaDepartmentofRevenue <br />12 <br />inequityanddiscouragesassessorsfromraisingassessmentlevelsintheir†Ò©z­7z-·zš“­u| <br />However,anumberofadministrativechallengestoaddresssthisissuehavebeenidentified. <br />Eliminatingtheexemptions.PropertyattheMinneapolisSt.PaulAirportisexemptfromfiscal <br />disparitiescontributions.WhiletheAirportmayseemalikelycandidateforinclusioninthe <br />program,eliminatingtheexemptionwouldbeproblematicsinceitwouldcontributetothepool <br />13 <br />butwouldnotreceiveanydistributionunderthecurrentpopulationbasedformula. <br />Eliminatingthe1971basevaluesubtraction.Theargumenthereisthatthe1971startingpoint <br />{7z­-©z’z“·;­againstthoseareasthathaveexperiencedmostoftheirdevelopmentsince <br />14 <br /> <br /> <br />Relatedtothisistheconceptthattheareawidepoolreflects40percentoftotalC/I <br />valuationfrom1971includingincreasesduetogrowthandinflation.Ithasbeenarguedthat <br />onlynetnewgrowthshouldbeincludedbasedonthelogicthatdevelopmentisabletooccur <br />becauseofregionalinvestment(e.)andthereforetheformulawouldbemore <br />g.,roads,sewers <br />reflectiveofthe¦©šm©’x­goals.Thecounterargumenttothisisthatthelawallowsfora <br />regionalbalanceamongpropertiesthatincreaseinvalueandthosethatdecline. <br />Includingaspendingneedcomponenttotheformula,ratherthanpurelytaxbasedriven.As <br />discussedinthisreport,thisaspectoftheProgramiswidelydiscussed.Theargumentbeingthat <br />spendingneedsofjurisdictionsvaryandtaxbaseisnotnecessarilyagoodpredictorofthose <br />needs.HinzeandBakernotetheinherentchallengestoalteringtheformulatoaccountfor <br />dtechnical. <br />thisarebothpoliticalan <br />StabilityoftheProgram.Ithasbeennotedonseveraloccasionsthattheprogramisseenas <br />stableandnotsubjecttoapoliticalprocess.Thisisseenasbothanadvantageanda <br />disadvantage.Anadvantageinthatitoccursasamatterofcourseandallowsforrelative <br />stabilityinlocalfundingavailability.Ontheotherhand,itslegacyasaprogramfromthe1970s <br />thathasnotbeenmodifiedandisnotpartofanypoliticalprocessleadstosomecriticism. <br />Longtermimpact.Anotherpointmadebystakeholdersconsultedforthisstudyistherapidly <br />developingareas›{äšÒ“m;©-š’’Ò“z·z;­|œmaybeexperiencinganincreasein <br />commercial/industrialgrowthrelativetopopulationgrowthandthereforemaybeanet <br />contributor.Asthesecommunitiesmatureandbegintobuildout,theymayremainnet <br />contributorsbutatasmallermarginormayseedeclineinvaluecausingatransitiontonet <br />recipientstatus.Thischan <br />gedstatusallowsforadditionalresourcestomakeuptheshortfall <br />andpotentiallysupportredevelopmentefforts,whichovertimemaytransitionthecommunity <br />backtonetcontributorstatus. <br />12 <br />HinzeandBaker,2005,p.,31. <br />13 <br />Id.,p.32 <br />14 <br />Id.,p.,32. <br />37 <br /> <br />