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Measures of city capacity & need

Measures of city capacity & need. Eric Willette & Nick Greene For Mayors LGA Advisory Group June 8, 2012. Road Map O verview. Purpose / Goals Review. What we think we’ve heard so far Provide property tax relief

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Measures of city capacity & need

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  1. Measures of city capacity & need Eric Willette & Nick Greene For Mayors LGA Advisory Group June 8, 2012

  2. Road Map Overview

  3. Purpose / Goals Review • What we think we’ve heard so far • Provide property tax relief • Ensure ability to provide core services (esp. public safety and public works) • Increase reliability and stability • Recognize diversity of needs and capacity • Encourage innovation and cooperation • Simplify formula

  4. Cluster Background • Clusters group cities according to region, size, property wealth, income and growth patterns • Updating needed but still show general trends • For ease of use, we’ve combined clusters into 3 metro and 5 Greater MN categories

  5. Cluster Background, Part 2

  6. Distribution Formula Overview • Current need-capacity formula • Aid bases

  7. Local Government Aid Per Capitaaverage 2008-2010 All city per capita average = $103

  8. Per Capita City Revenuesaverage 2008-2010

  9. City Property Tax Ratesaverage 2008-2010

  10. Property Tax Per Capita & City Tax Rates average 2008-2010

  11. Property Tax and LGA Per Capita & City Tax Rates average 2008-2010

  12. Property Tax Base Per Capita and City Tax Rate average 2008-2010

  13. City Property Tax BasePer Capitaby county2008-2010

  14. Median Household Income (2010)

  15. LGA and Sales Tax ($ millions) 1Based on Department of Revenue sales tax statistics for 136 cities 2Based on average LGA received 2008-2010 3 Based on average taxable sales 2008-2010 at a rate of 0.717% 4 City specific sales tax data is not available for cities with smaller populations and business counts Source: Department of Revenue

  16. Per Capita Net Revenue Change from Replacing LGA with 0.717% Sales Tax

  17. LGA Per Capita & Sales Tax Per Capitaaverage 2008-2010

  18. City Spending Per Capita by major category, average 2008-2010

  19. Public Safety Spending Per Capita average 2008-2010

  20. Streets & Highways Spending Per Capita average 2008-2010

  21. Formula Factors of Need

  22. Other measures of Overburden

  23. Public Safety City Spending Per Capita & Jobs Per Capita average 2008-2010

  24. Public Safety and Streets City Spending Per Capita & Tax Exempt Property average 2008-2010

  25. Median Household Income (2010) and LGA Per Capita (2008-2010)

  26. Wrapping Up • LGA cities raise less property tax with higher tax rates and spend more • Property tax base is more uniform than sales tax base among cities • Higher spending on public safety and public works is correlated with several overburden measures

  27. Wrapping Up (continued) • Cities have diverse needs and capacities • What you measure depends on the program goal or goals • Multiple goals and many variables results in a complicated formula • A more simple formula must ignore some relevant differences among cities

  28. Thank you • Eric Willetteeric.willette@state.mn.us • Nick Greenenick.greene@state.mn.us

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