pf_03065 - Laserfiche WebLink

Home

VII. PROPERTY TAX, FISCAL DISPARITIES, AND STATE AID PROJECTIONS This section outlines the methodology that wi II be used to project future Property Tax, Fiscal Disparities, HACA, Local Perfonnance Aid, and Local Government Aid revenues from new development. The methodology is based on: I) research on how Minnesota's Fiscal Disparities and State Aid programs work, and 2) applying the case study-marginal cost approach which analyzes the net impacts of new growth based on the current budgetary structure of the City. Property taxes (including fiscal disparities) account for about 43 percent of total General Fund revenues in FY99 ($3.4 million of the total $7.99 million). HACA ($1.8 million) accounts for about 22 percent of the total and Local Government and Local Performance Aid ($110,000) accounts for 1 percent of the total budget. There are several difficulties in attempting to project these revenues. First, calculations for fiscal disparities depends on how the City of Roseville grows relative to other jurisdictions in the seven county region. Since the region as a whole is not being modeled (and probably could not be adequately modeled over 20 years even if attempted) the relative differential cannot be determined. Therefore, it has to be assumed that the regional characteristics Gobs to housing ratio, etc.) remain constant relative to the 20 year land use projections in Roseville under the two scenarios. This relies on the snapshot approach and must be kept in mind when analyzing the results of the model. In 1999, fiscal disparities revenues to Roseville account for about 9 percent of the total property tax levy. How this changes due to new growth is explained in the methodology outlined below. Second, HACA and Local Government Aid can change each year at the whim of the State legislature. Obviously, it is therefore impossible to project these revenues into the future. (The State legislature can also change tax class rates, which impact property tax and fiscal disparities revenues.) Again, for purposes of the fiscal analysis, a snapshot approach has to be used where the current formulas for these revenues are used for future projections based on growth. As it turns out, HACA revenues for Cities did not increase from 1998 to 1999. Therefore, the snapshot approach would dictate that there will be no increase in this revenue source into the future. Local Government Aid is based on a FY99 fonnula, which is used to project future revenues using the snapshot approach as explained below. Again, this should be kept in mind when analyzing the results of the model. Third, HACA, Local Government Aid, and Property Taxes (including fiscal disparities) are all interdependent. That is, the formulas for determining the amount the City receives each year incorporate all of these revenues. This further compounds the problem, given that the difficulties of projecting one revenue source therefore impacts the results of the others. Gi ven the above, the question arises of the true value of this study, if a large part of total revenues to the City cannot be projected with any certainty. This can be answered in two ways. First, since consistent projection methodologies are used for two growth scenarios - a Trends Growth scenario and a High Growth scenario - then the difference between the two can become apparent. And understanding the relative differences between these two types of growth scenarios. in the context of demographic and economic characteristics of various city types. is the Page 31 Tischler & Associates, Inc,