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2013 Budget Worksession August 21, 2012

AGENDANEW BUSINESS

FINAL STATE BUDGET AND FUNDING IMPACT.

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

4,000,000,000

4,500,000,000

5,000,000,000

Total City Aid/Sales Tax Revenue by Fiscal year

City Aid MN Sales Tax Revenue

State Revenues vs City Assistance

LGA Payment History

LGA Payment History

LGA Payment History

2013 LGA Distribution

Future Deficit

Statewide Business Property Tax

MVC

Mounting Minnesota Projected 2014-15 Def...

-$6,000,000,000

-$5,000,000,000

-$4,000,000,000

-$3,000,000,000

-$2,000,000,000

-$1,000,000,000

$0-

$1,103,000,000.0

0-

$1,058,000,000.0

0-$2,432,000,000.0

0-$525,000,000.00

Est. Re-turn MVC

Schools

Inflation

Forecast

Statewide Business Property Tax

Statewide Business Property Tax

Local Property Tax Increases far Outpace State

Tax Reform

Tax Reform

Tax Reform

MN State Budget (FY 2013)

Property Tax Aids & Credits (FY 2013)

Greater Minnesota Programs Cut

State Fiscal Impact on Cities19

State Local Government Aid annual payments have decreased $40 million from 2003-2012. The total State tax annual revenues over this time increased 31.3% or about $4.5 billion.

The City of Marshall will receive about $2.1 million in State LGA in 2012. Whereas, the State received about $19.9 million in sales and use taxes (2010) that were generated within the City of Marshall.

In 2011, the State eliminated the Market Value Credit Program, eliminating their $260 million property tax relief funding, and instead replaced it by shifting the tax burden primarily to commerical/industrial properties with impacts in taxes payable 2012.

2013 Budget Preparation LGA20

LGA 2012 Certified = $2,110,608LGA 2013 Certified = $2,110,608

LGA is underfunded and needs to be increased in State funding.

LGA Formula Review…Again.Local government needs an alternative to

property taxes in funding. If the State is unable to provide funding then providing