Forwarded on behalf of the city's information office. -- David Brauer, list manager
Impact of Governor’s Budget Proposal on the City of Minneapolis
Preliminary Estimate
January 10, 2002
While considerable analysis needs to be done to evaluate the impact of the
Governor’s budget proposal, City staff after consultation with the Department of
Revenue, provides below a very preliminary estimate of what the impact is estimated to
be on the City of Minneapolis. In summary, this is our best assessment of the impact
at this time.
2002 Budget
Local Government Aid (LGA) to Minneapolis under the Governor’s proposal
would be cut by $14.9 million in 2002 (a 13% reduction) from $111.6 million to $96.6
million. The reduction represents a 5.7% reduction on the combined total of 2002 levy
and state aids for Minneapolis, according to the state’s calculations.
If the City Council were to spread the loss of revenue to the independent boards using
the same allocation basis as that used by the state, which was a percentage cut on a
combined total of levy and state aid, the loss of revenue would be distributed as
shown below. It is a local (city) decision on how the cut in state LGA would be
distributed between these entities.
2002 Proposed
Revenue Loss % of Total
City Other $10,970,000 73.5%
Park Board $2,740,000 18.4%
Library Board $1,220,000 8.2%
Total $14,930,000 100%
2003 Budget
State amortization aids for Police and Fire pensions are proposed to be
eliminated in 2003, which would result in a $1.48 million revenue loss to Minneapolis,
according to the state’s estimates
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