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Data for LGA Formulas

Data for LGA Formulas. Mayors LGA Advisory Group August 10, 2012. Any Data Used Should Meet the Following Basic Criteria. Accurate and consistent across cities Available on a regular basis Consistent over time Measures what you think it measures Is useful in meeting the program goals .

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Data for LGA Formulas

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  1. Data for LGA Formulas Mayors LGA Advisory Group August 10, 2012

  2. Any Data Used Should Meet the Following Basic Criteria • Accurate and consistent across cities • Available on a regular basis • Consistent over time • Measures what you think it measures • Is useful in meeting the program goals House Research Department

  3. Reasons Data is Rejected From a Formula • Doesn’t meet the basic criteria in slide #1 • Other data “explains” more of the variation in need (too many factors) • Data is highly correlated with data already included in the formula (multicollinearity) • Data does not show the expected relationship House Research Department

  4. Possible Program Goals • Tax base equalization • Revenue sharing • Ensuring the ability to meet basic minimal needs • Ensuring the ability to provide an average level of service at an average level of effort House Research Department

  5. Measures of Ability to Pay/Effort used or Proposed in the Past • Property tax base ( Adjusted net tax capacity) – current formula, most proposals • Property tax rate – early LGA formulas • Income plus exporting approach (Ladd study) House Research Department

  6. Current Need Measures in Basic LGA Formula House Research Department

  7. Other Need Measures in City or County General Aid Formulas • Jobs per capita – jobs aid for cities over 5,000 in LGA formula • Part I Crime Rate – used in county aid • Average monthly households receiving food stamps – used in county aid • Population over 65 – used in county program aid • Natural resource tax exempt property – PILT payments House Research Department

  8. Data Used in Proposed LGA Formulas House Research Department

  9. Data Used in Proposed LGA Formulas House Research Department

  10. Other Variables Considered in 2003 Effort House Research Department

  11. General thoughts • You need to have prioritized goals before you can chose data to meet those goals • If everything else is equal simple is better than complicated • Don’t push the data and analysis too far – in the end a formula will only survive if it passes the “common sense” test • Decide how to deal with losers under a new formula House Research Department

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