01-10-1994 Council Packet - Laserfiche WebLink

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n stability atul integrity of the fund. Cities continue to support the concept of the LGTF which inclutlcs in irrcvocaUe dedication cf a portion of the sales tax and motor vehicle excise tax to a defined and stable set of profKrty tax relief programs. If dedication cannot be assured under the current system, the League will pursue modifica».ons to tlw structure and composition of the fui.J or a constitutional dedication of the trust fund revenues to property tax relief programs, or both. B. To prevent rapid increases in local property taxes, city aid from the local government trust fund (LGTF) should adjust annually at the same rate as sales tax and motor vehicle excise tax (Af\'ET) revenues. The LGTF was established to provide a secure source of funding state aid and property tax relief programs. These programs are an important revenue source for most cities. Without growth in these programs, property taxes would be us^ to fund all necessary buagetary increases. C. The League supports modification to the local government trust fund (LGTF) provisions governing surpluses and shortfalls in the fund; all programs funded by the trust fund should be adjusted in a direct proportion to the surplus or shortfall. Currently, surpluses are distributed to local government aid (LGA), the county community social services act (CSSA), and county criminal justice aid. Shortfalls in the LGTF are balanced by reducing nearly all programs funded by the LGTF, including homestead and agricultural credit aid (HACA). The integrity of the LGTF would be enhanced, and the volatility of any particular program would be reduced if all programs were adjusted in a similar manner. D. The League opposes changes to the property tax elass(fication/HACA system that would cause significant shifting of property tax burdens from one class to others. A portion of the property tax relief provkJed to farms by the 1993 Legislature was accomplished by shifting county and schcx)i taxes to city taxpayers. This shifting causes local property tax burdens for certain properties to increase due to the actions of the Legislature. However, local government officials are held responsible by their taxpayers. RS*3. Service DupIkatiQO Taxation Exclusion (A) The League encourages the Legislature to adopt League supported legislation which would enable city property taxpayers to become exempt fivm county levies for services which are either not provided to city residents or which duplicate services provided by the city. In many cities, residents are paying the costs of county provided services such as police protection, which primarily benefit county residents outside the city. In other cases, city residents may receive benefits from the county spending, but the services duplicate services which city governments are already providing. In order to more fairly allocate the cost of services and to eliminate duplication, city taxpayers and city governments should be given authority to petitioii to be exempt from county taxes or fees for services that duplicate city service or for services that are not provided by the county within the city limits. Currently, the city taxpayers in some cities are not required to contribute to the costs of a county library system if they are already paying for a city library system. Legislation should be passed to allow this arrangement to be extended to other services. During the 1994 session, the Legislature should study this proposal and hold hearings to allow testimony League of Minnesota Cities