CR 08-019 Resolution in Support of Legislation that would revise Minnesota Statutes Relating to Local Government AidFebruary 19, 2008 Council Report 2008-019
Resolution in Support of Legislation that Would Revise Minnesota
. Statutes Relating to Local Government Aid (LGA)
Proposed Action
Staff recommends adoption of the following motion: Move to approve Resolution 2008-
019, AResolution in Support of Legislation that Would Revise Minnesota Statutes
Relating to Local Government Aid (LGA).
Adoption of this motion will show support by the City of Hopkins, in conjunction with
several other Twin Cities suburbs, that the current formula for LGA needs revision.
Overview
A model resolution was provided by the City of Fridley to several Twin City suburbs
requesting support for a legislative change to the LGA formula to better reflect the
needs of those suburbs. Several suburbs and the Metro Cities organization have been
discussing the need to change the formula and provide additional funding to the
program. Even though it appears unlikely additional dollars will be allocated to the
program under current fiscal conditions, suburban cities still need to draw attention to
the LGA issue.
Primary Issue to Consider
• Does the resolution fit the City of Hopkins legislative priorities?
Supporting Information
• Resolution Number 2008-019
^~.~
Ric Getschow
City Manager
Financial Impact: N/A Budgeted: Y/N N/A
Related Documents (CIP, ERP, etc.):
Source:
Notes:
Council Report 2008-019
Page 2
Primary Issue to Consider
• Does the resolution fit the City of Hopkins legislative priorities?
Yes. This resolution is in line with the Hopkins 2008 Legislative agenda on the topic of
LGA which reads as follows:
Local Government Aid (LGA), the only remaining form of general purpose state aid to
Minnesota cities, has been systematically reduced and modified by previous
legislatures, at a significant cost to most metropolitan communities. As a result of these
changes a majority of the metropolitan area's 183 cities no longer receive any LGA.
• The City of Hopkins supports the restoration of previous LGA cuts to fully
fund the current LGA formula.
• The City of Hopkins supports the distribution of LGA in a manner that assists
those cities whose public service needs and costs exceed their ability to pay.
• The City of Hopkins supports modifications to the current LGA formula that
more adequately measures these needs and abilities to pay than does the
current formula.
• The City of Hopkins supports the development of a new LGA formula that
addresses current problems of volatility with year-to-year LGA distributions.
• The City of Hopkins recognizes that any new LGA formula must fairly
represent the public service needs and costs of older, first ring suburbs.
• The City of Hopkins supports the inclusion of inflationary factors in any
formula.
CITY OF IIOPKINS
HENNF,PIN COUNTY, 1-IINNESOTA
RESOLUTION 2008-019
RESOLUTION IN SUPPORT' OF LEGISLATION TI-IAT ~'~'OULD
REVISE MINNESOTA STATUTES RELATING 7'O LOCAL GOVERNn~IENT AID
WHEREAS, the current for»>ula for the distribution of Local Government Aid distributes
less than 5% of the total to metropolitan area suburbs; and
WHEREAS, the current formula for the distribution of Local Government Aid provides for a
per capita distribution that generates $213 for the residents of Minneapolis and St. Paul, 5210 for
the residents of Greater Minnesota cities, and ~ 10.90 for the suburban residents of the seven-
county metropolitan area.
WHEREAS, the population of these suburbs is 41 % of the total population of Minnesota; and
WHEREAS, the residents and businesses of the suburban pol"tlons of the seven-county
metropolitan area generate 67% of Minnesota's income and sales tax collections; and
WHEREAS, the current LGA distribution bears little resemblance to the growing costs of
local government in Minnesota cities; and
WHEREAS, the 2003 amendments have created ald d1St1"lblttl011 11L111~bC1'S t0 clues that arc
certified late in eac11 city's budget cycle and subject to considerable volatility; and
WHEREAS, the complexity created by the 2003 amendments has created law that is very
difficult to understand and interpret; anti
«'HEREAS, many suburban cities in the Minneapolis/St. Paul metropolitan area have been
forced by the 2003 amendments to raise property taxes by more than 50 % to accommodate
lost LGA revenue; and
WHEREAS, property taxes are the most regressive form of taxation.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hopkins
requests that the Governor and the Legislature for the State of Minnesota approve legislation that
changes the State's Local Government Aid distribution formula by substituting local government
expenditures, subject to a 5% annual cap, for the five-part needs formula currently used for this
distribution; and
BE IT FURTHER RESOLVED, that t11e City Council of the City of Hopkins requests that
the Governor and the Legislature of the State of Minnesota provide funding for this re~~iscd
distribution, subject to the condition that no Minnesota City receive less allocation than 90% of
the amount certified to it for fiscal year 2007.
PASSED AND ADOPED BY THE CITY COUNCIi. OF THE CITY OF HOPKINS, 1iINNESO"I'.-~,
THIS DAY OF FEBRUARY 19, 2008
A"hTEST:
Terry Obermaier, City Clerk
Eugene Marvell, Mayor