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MEMOPu NDUM <br /> <br />TO: <br /> <br />Lori Johnson, Sandy Peine, Michele McPherson, Cathy Mehelich, <br />Steve Rohlf, Phil Hals, Rich Czech, Dave Potvin, Terry Maurer, <br />Gary Leirmoe, Bruce West, Tom Zerwas, Michele Bergh, Sue <br />Kostanshek, Chris Johnson, Mick Stoffers <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Pat Klaers, City Administrator <br />February 24, 2003 ~ <br /> <br />Governor Pawlenty's Budget Proposal <br /> <br />The League of Minnesota Cities (LMNC) has provided a summary of the LGA and Market <br />Value Homestead Credit cuts for 2003 and 2004, as proposed by Governor Pawlenty. This <br />information can be found on the LMNC website (vox, w.lmnc.org). <br /> <br />The proposal from Governor Pawlenty impacts Elk River significantly. The Govenor has <br />stated that the cuts represent a maximum of 5% of the total city revenues in 2003 and a <br />maximum of 9.5% of the total city revenues in 2004. What is not said is that almost <br />everything is included in the total revenue figure. If you levied taxes to pay bonds, that is <br />part of the total revenue; if you received state funds for a street project, that is part of the <br />total revenue. The reality is that the cuts need to come from the General Fund Budget as this <br />is where the LGA and the Market Value Homestead Credit revenues are located. The <br />Governor's proposal results in a $644,138 reduction in 2003. This is about an 8.4% cut from <br />the already approved 2003 General Fund Budget. The proposal for 2004 is a $1,292,865 <br />reduction in aids. This is a 16.8% reduction in 2004 from the adopted 2003 General Fund <br />Budget. According to the Govenor's plan, in 2004 we are scheduled to receive zero ($0) <br />LGA and Market Value Homestead Credit. <br /> <br />Hopefully the £mal result will not be this severe for the City of Elk River. Additionally, we <br />can hope that levy limits will not be imposed in 2004 but this seems unlikely and I have <br />every expectation that some form of levy limits will exist for municipalities in 2004. (As you <br />most likely know, all of this is in addition to a proposed wage freeze for two years for <br />government employees, which includes municipalities.) <br /> <br />3'/A#rmk/ l°at/ LGACul.~- <br /> <br /> <br />