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IV. Special levies j ^ j u <br />The original House bill contained a provision limiting use of bonded debt special <br />levy. That has been deleted from the final bill. Bonded debt remains an uncapped <br />special levy as it has been for two decades. The only significant city change to the <br />special levy section was the addition (roll in) of the pension special levy to the 199. base <br />at the 1991 level without increase. <br />V. Homestead and Agricultural Credit Aid (HACA) <br />* One of the major concerns of legislators when discussing reduction of the class <br />rates for high valued homes and OI property was the very large tax shift onto low valued <br />homes and other property to replace the reduced taxable value, TOs was especially <br />difficult because of the state's $1.1 billion shortfall. <br />The solution became possible with adoption of the increased half cent sales tax <br />option. The extra funds allow the state to replace on a dollar-for-dollar basis the <br />city/county lost revenue created by the value reduction, thus prevenung an increased tax <br />burden on other property. j .u i ♦ <br />These payments will be made to cities in the form of HACA and tn6 <br />hi.n»ficiarigs h# Pi»nen*llv metro cities with a great figa l Of high Va lU^ hOlllSS <br />anH r/l nrnnwtv many of which r..rrPntlv reCPivP verv littlC LCf A OF HALA- <br />Over the next three years. $211 million (preliminary legislative esnmatc) is <br />budgeted to buy down the class rate reductions, of which about $175 million (or 8 <br />percent) will be distributed to metro area cities. The sales tax increase and the 2-cent <br />dedication to local govemmer*. both city and county - provide a connnually growing <br />pot of money which, hopefu’ y, will make future LGA/HACA reduenons unnecessary. <br />VL Local Government Trust Fund <br />This fund will receive revenue from the half-cent optional sales tax plus 1.5 «nts <br />of the current six-cent sales tax. or a total of i^o cents from the sales <br />fund is dedicated to pay for existing non-school aid programs including LGA. HACA. <br />disparity reduction aid, equalization aid. attached machinery aid. border city dispanty aid <br />and a few other minor programs. There is some income maintenance u^over Ending <br />equal to about 0.1 cent initially to balance the dedication at two cents. The fund is <br />projected to grow at about 7 percent per year with new money allocated primarily to <br />city/county new and existing property tax relief programs. , , r-ioi: n « <br />Revenue is expected to be $700 million in 1991-92 (11 months). $786 million in <br />1992-93, $842 in 1993-94 and $898 million in 1994-95. <br />For 1991 and 1992. the distribution will be as per current formula. For 1VV3 ana <br />thereafter, it may change based on recommendations of a new Advisory Commission on <br />Intergovernmental Relations (AQR). ACIR initially will have as members four city <br />officials, three county commissioners, one town board member, five reprcsentauves. ive <br />senators and two members of the governor s staff. <br />Vn. Referenda Levy on Market Value <br />All general education referenda (not including school capital bonds) and non­ <br />school referenda (cities, towns and counties) held for taxes payable in 1993 and <br />thereafKr vvUl be levied on the market value rather than on the net tax capacity of <br />k .-srAv.