11-26-1984 Council Packet - Laserfiche WebLink

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LEGISLATIVE POLICIES 1985-1986 MUNICIPAL REVENUE AND TAXATION I -A 5% LEVY LIMIT REPEAL The Asso ation of Metropolitan Municipalities has consistently opposed the levy limit laws in that they apply uniform statewide restriction:, to cities and are too inflexible to accommodate inflation, uncertanties in state and federal financial aids, and the diverse problems and circumstances faced by cities throughout the state. Such laws are inconsistent with principiei of local self-government and accountatility. 1either do they recognize changing local conditions as to either eypenditire needs or revenue sources. Levy limits may ultimately work against the interests of local taxpayers because the law creates an incentive for cities to take maximur,, advantage of the opportunity to make general or special levies. For examYle, the arbitrary decision in 1981 to create a new levy limit base effectively penalized those cities that were successful in holding down their property tax levies in 1981. History has now provided cities with numerous lessons teaching that cities which choose to levy less than the maximum allowed in a giver, year risk being later tied to unrealistic or artifically low new limits for future budget years. Therefore, THE AMM REMAINS STRONGLY OPPOSED IN PRINCIPLE TO SUCH LIMITATIONS AND RECOMMENDS THAT THE MINNESOTA LEGISLATURE REPEAL LEVY LIMIT LAWS FOR CITIES. I-B LEVY LIMIT MODIFICATIONS Although the AMM is strongly copp„zed to Levy Limitations as currently legislated, the organization is aware that there is significant legislative initiative to maintain the responsibility for local Groperty tax levels. Hore.er, :oval government must eontinut dr.,; be allowed to prcvide f-r services that -Pole demand and that state and federal law require. Therefor.:, if repeal. is not :adopted, the Association supports aner,'A4ments to the ;resent levy limi`, law to provide furti,er relief from current inequities. H-1 REALISTIC LEVY BASE The 1983 legislature restored the }rc 198' levy base formula of local government aids plus levy limit, on which annual growth is calculated without regard to actual levy. This method provides that cities may levy less than the limit without losing the ability to regain the underlevy in future years. The leg .ature also provided growth based r)n an index rather than a flat percentage and growth increase for the greater of population or householdr, and some base growth for commercial and industrial activity. All of thc:F- erowth fa.t. r: are neces:-,,ry a-, minimum