LGA cut as shutdown ends

Early this morning the House and Senate passed a tax bill, which Governor Dayton signed into law. The tax bill includes cuts to Local Government Aid and the Market Value Credit, but no levy limits. In 2011, a city will receive the 2010 paid LGA or certified 2011 LGA, whichever is less. 2012 LGA will be the same as 2011. In 2013, the program will return back to the formula with a total appropriation of $426 million. In 2011, cities will receive the same amount of Market Value Credit reimbursement as they did in 2010. In 2012, the MVC will be converted from a credit, or direct reduction of a homeowner’s total tax owed, to a reduction in a homeowner’s property value. This will eliminate the need for the state to reimburse local governments for the credit. Due to the timing of the special session, LGA payments will be delayed. Instead of being sent out July 20, they will be sent out July 27.

A breakdown (run) of the impacts to individual cities can be found at 2011__final_lga_mvc.



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