Posts Tagged ‘LGA’

State Aids: The Shrinking Slice of the City Revenue Pie

City property taxes have increased significantly in recent decades. Even after adjusting for inflation and population growth, the property taxes collected by Minnesota cities have increased by 48% from 1990 to 2018. However, real (i.e., inflation-adjusted) per capita city revenues are down over the same period. The rapid growth in property taxes and the decline…

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2018 Local Government Aid Funding in Perspective

Local Government Aid (LGA) has long been an important source of funding for city services and property tax relief. A 2018 LGA funding hike provided valuable new resources to cities, but not quite enough to keep pace with inflation and population growth from 2017 to 2018. Today total real (i.e., inflation-adjusted) per capita (per person)…

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Aid, Tax, and Revenue Trends in Three Cities

In recent decades, steep reductions in state aid to Minnesota cities have resulted in significant increases in real (i.e., inflation-adjusted) per capita city property taxes and reductions in real per capita city revenues. Aggregate city data, however, can conceal what is happening within individual cities. This article will focus on city property tax, state aid,…

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State Aid Ups & (Mostly) Downs for Cities

Except for a few intermittent spikes, state aid to Minnesota cities has trended downward since 1990. In general, cities have dealt with declining state aid through a combination of property tax increases and budget reductions, although the city response to aid vicissitudes has varied over time. The following analysis will focus on the total “revenue…

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City LGA Differences Among Various Plans

Governor Dayton’s city Local Government Aid (LGA) proposal increases the LGA appropriation in the upcoming two year budget, while the House freezes the appropriation and the Senate cuts it, as noted in the preceding North Star article. Knowledge of the appropriation alone, however, does not tell us how much aid individual cities will receive. In…

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City Aid Declines Under Most LGA Proposals

For the last four and a half decades, the city Local Government Aid (LGA) program has helped cities fund essential services and control property tax levels, but in real (i.e., inflation-adjusted) dollars per capita, city LGA is currently less than half of what it was in its peak year of 1990 and about 20 percent…

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Sharp Jump in Homeowner Property Taxes

Property taxes paid as a percent of income have declined for the typical Minnesota homeowner since 2007, according to the Minnesota Center for Fiscal Excellence (MCFE), formerly the Minnesota Taxpayers Association. As noted in the previous article in this series, however, this conclusion is not necessarily warranted by the data. Furthermore, if we look at…

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Homeowner Tax Rates Aren’t Necessarily Falling

Local elected officials have argued that property tax increases—including homestead tax increases—combined with declining real per capita local government revenue have fueled the need for an increase in state property tax aids and credits. But not so fast, says the Minnesota Center for Fiscal Excellence (MCFE), formerly the Minnesota Taxpayers Association. The first installment in…

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Aids & Credits Down, Property Taxes Up

Homeowners’ property tax effort is feeble and property tax aids and credits provided by the state of Minnesota are adequate—if not robust—according to a recent article from the Minnesota Center for Fiscal Excellence (MCFE), formerly the Minnesota Taxpayers Association. This conclusion, however, is based on property tax and state aid information that is selectively presented…

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City LGA: A Shrinking Slice of the Budget Pie

Local Government Aid (LGA) has been a mainstay of city finances since its inception in 1972. In fact, many small, low tax base communities receive more in LGA than they collect in property taxes. That being the case, LGA is a perennial hot topic at the state capitol. A recent North Star article demonstrated that…

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