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RELEVANT LINKS: <br />League of Minnesota Cities Handbook for Minnesota Cities 10/15/2015 <br />Municipal Budgeting Chapter 211 Page 15 <br />In Minnesota, license fees must approximate the direct and indirect costs in <br />issuing the license and policing the licensed activities. <br />D. Intergovernmental revenue <br />1. Local government aid <br />LMC, Local Government Aid <br />For some cities, local government aid (LGA) from the state is a significant <br />101, July 2015. <br />source of income. The goal of LGA is to equalize cities' ability to provide <br />LMC, History of Local <br />an average level of services at reasonable property tax rates. <br />Government Aid to Cities. <br />A complex formula determines how much LGA each city receives. The <br />LMC: 10 LGA Key Points, <br />July 2015. <br />Minnesota Department of Revenue certifies how much LGA each city <br />receives by Aug. 1 of each year. Cities receive two annual LGA payments - <br />ayments101, <br />LMC, Dates for City Budgets <br />10 1,July 2014. <br />one in mid-July and the other at the end of December. <br />Minn. stat. § 477A.014. <br />The commissioner of the Department of Revenue notifies each city of its <br />Department of Revenue: <br />LGA distribution during the first week of August. Cities have 60 days to <br />Local Government Aid <br />appeal the calculation or factors used in the computation. Special <br />(LGA) and Annexations, <br />Boundary changes, or <br />considerations apply for cities dealing with annexation or a change in the <br />Changes in Form of <br />form of city government. <br />Government. <br />2. Market value homestead credit ended in 2011 <br />The Legislature eliminated the market value homestead credit program <br />effective for tax year 2012. The main problem with the program for cities <br />had been that the state did not always reimburse the entire amount of the <br />credit. Thus, cities did not receive the full amount they levied in a given <br />year. The program was replaced by the homestead market value exclusion. <br />3. Homestead market value exclusion <br />Minn. stat. § 273.1393. <br />The homestead market value exclusion (HMVE) program replaced the <br />Minnesota Department of <br />MVHC program for taxes payable in 2012 and beyond. Therefore, in 2013 <br />Revenue: Market value <br />there will be no separate MVHC payments coming from the state. This <br />Exclusions: A Primer for <br />Local Governments. <br />means that what the city levies is what the city receives directly from <br />property owners. This law is effective for taxes payable in 2012 and <br />thereafter. <br />In place of the MVHC program, homeowners will receive an exclusion of a <br />portion of the estimated market value of their house from property taxes. <br />The exclusion is computed in a manner similar to the market value <br />homestead credit. <br />League of Minnesota Cities Handbook for Minnesota Cities 10/15/2015 <br />Municipal Budgeting Chapter 211 Page 15 <br />