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Certified 2013 LGA distribution amounts vary little from estimated amounts.
(Published Aug 8, 2012)
By now, cities should have received information from the Minnesota Department of Revenue (DOR) about their 2013 LGA distribution. The certification notices are required under state law to be distributed before Aug. 1 each year. The certified amounts are very similar to what the DOR had estimated earlier.
The DOR has prepared a city-by-city listing of certified LGA amounts. A separate document is also available explaining the factors used in the distribution formula.
A city’s 2013 certified LGA distribution is based in part on its population. According to Minnesota Laws 2012, Chapter 294, cities with populations of 5,000 or more will receive a 2013 LGA distribution equal to their 2012 LGA amount, while cities under 5,000 receive the greater of their 2012 LGA or the amount they would otherwise get under the LGA formula in 2013. For most cities, this means that their 2013 and 2012 certified LGA amounts are equal. In just 83 cities the 2013 formula amount is greater than the 2012 certified amount.
Although the LGA formula was only used to distribute aid to 83 cities, updated data for all of the factors in the formula is now available. Several of the factors are based off of data obtained from the decennial census and, until this year, used data from 2000. Additionally, due to the elimination of the census long form, some data pieces are now obtained from the American Community Survey.
The new homestead market value exclusion (HMVE) program, which reduces the value of qualifying homes for tax purposes, does not affect the 2013 distribution. Due to the data lags in the calculations of LGA, the tax base effects of HMVE won’t be reflected until the 2015 aid distribution.
Overall, certified city distribution amounts vary little from estimates produced at the end of the 2012 session. (See the back of the LMC 2012 Law Summaries (pdf) for a city-by-city list of these estimates.)
For 62 cities, the certified 2013 LGA amount is greater than had been estimated. Most of these increases were very small; the greatest was just 3 percent. Certified amounts were less than estimated in just 10 cities. In these cities, the difference between the estimated and certified amounts is less than 5 percent.