03-14-1988 - Agenda Packet City Council - regular meeting

Home Browse Search

FEDERAL AND STATE REVENUE SHARING FOR MINNESOTA CITIES DECLINING During the 1980s, the level of federal and state aid provided to our cities diminished relative to what was available in the previous decade, when the national and state economies were relatively healthy. A severe recession in 1981-82, an es- calating federal deficit, and a number of budget crises at the state level have all converged on Minnesota's state and local governments and have decreased the financial resources available for the delivery of services. Financial data clearly indicate that economic assistance provided to Minnesota cities by federal and state govermner's has drooped significantly over the past decade. As evident ir, Chart 2, the most precipitc decline occurred between 1978 and 1982 when both federal and state governme .,ere withdrawing financial sup- port. Since 1982, the rate of decline has slowed _,Ilewhat. However, with the 1987 elimination of $40 million in federal general revenue zharing and the limits placed on the state's local government aid funding, total aid to Minnesota's cities is projected to resume its steep decline. In real (inflation -adjusted) dollars, combined fedora; end state aid to Minnesota cities dropped 16 percent between 1978 and 1986 according to State Auditor in- formation. Witn the elimination of general revenue sharing in 1987, the total decline between 1978 and 1987 is projected to be 23 percent. This projected decline is shown by the broken line in Chart 2. (See Table 2 in Appendix for relevant statistics.) IM MI LLIMS. Ins DQWS DMMIT 2. rmLMl. I STATE AID To MI"ES A CITIES, 1979-87 IM CWSTMR WI WS Inr In% 1W INI IN} EMI INM EMS IW IN7 L...... ..... .... .. .. ............... .. ............. • Sv TART 2 III AMlO11 IM WA. IMN• ,M STJTI MT'.. TEMWL t STATE I.IDI U.1. P{rT. M rw'Cp rM STATE L L0U1 IMLICIT'ICE K,&M.