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STATE AID TO CITIES DECLINING AS SHARE OF STATE REVENUE <br />When the LGA program was created in the early 1970s, it was considered to be <br />a mechanism by which the state would share its rising income and sales tax revenues <br />with cities. However, LGA funding and total state aid to cities have declined as a <br />percent of state revenue. Thus, the state has become less and less willing to share <br />its revenues with cities. <br />The state's four largest revenue sources -- the individual income tax, sales tax, <br />corporate and bank income tax and motor vehicle excise tax represent 70 percent <br />of all state revenue. As illustrated in Chart 4 below, in 1980, LGA funds represented <br />8 percent of the state's four largest revenue sources. By 1988, it has decreased to <br />just above 6 percent. A two percentage point decline may not seem significant, <br />however, 2 percent of these four revenue sources in 1988 is equal to over $90 million. <br />Similarly, in 1980, total state aid to cities represented nearly 15 percent of the state's <br />revenue from the four largest taxes. By 1986, that portion had declined to 12 percent. <br />By 1988, that share can be projected to decline to 11 percent. (See Table 4 in Ap- <br />pendix for assumptions underlying projections.) <br />CHART 4- <br />STATE AID TO CITIES AS SNARE OF STATE REVENUE <br />19so-19SA <br />TOTAL STATE AID TO CITIES <br />Mcon <br />sic NOUN 10 <br />TAKES <br />CITY LOCAL GONCNINmFI AID <br />19M 1981 1962 198) 19" 1905 1986 1907 1968 <br />............................................................................ <br />• SEE TANLE A IN APPIDIDIX FM DATA. <br />•• NIC POUR TAKER INCLUIIT INDIVIDUAL IIMm Tm, SALO TAE, IRl7A TMICLE <br />TAX. • CORPORATE INCOME A HANK EKCISE TAK. <br />SOMM M DEPT. OF FINANCE PM BIG FOUR TAKES; IEI STATE ADDTTDE MN <br />RTATP AID; MN DEPT. OF RCVFM'F PON LCA .AMOUNTS. <br />7- <br />