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Last Updated: 2/23/2012

2009 and 2010 Aid and Credit Reductions

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In June of 2009 the Governor announced unallotments of 2009 and 2010 County Program Aid (CPA) for counties, Local Government Aid (LGA) for cities, and market value credit (MVC) reimbursements for counties, cities, and towns. Given the challenges to the Governor’s unallotment authority, the 2010 Legislature essentially ratified the unallotments. Specifically, the Legislature voided the unallotments and enacted legislated reductions under M.S. §477A.0132 in essentially the same manner and amounts.

In addition to the unallotment-based reductions, the 2010 Legislature enacted additional reductions to CPA, LGA, and MVC reimbursements for cities and counties under M.S. §477A.0133.

Calculation of Unallotment-Based Reductions

The unallotment-based reductions for both 2009 and 2010 reductions are calculated as a percent of 2009 revenue base. For counties, the revenue base is equal to certified levy plus certified county program aid (CPA) plus taconite aid. For cities, the revenue base is equal to the certified levy plus certified local government aid (LGA) plus taconite aid. For towns, the revenue base is equal to the certified levy plus certified local government aid (which is not currently provided for but is referenced for consistency) plus taconite aid.

For 2009 and 2010, counties with a population of less than 5,000 and Mahnomen County (due to the lost casino tax base) are exempt. For 2009, the unallotment-based reduction for all other counties is equal to 1.188968672 percent of the county’s 2009 revenue base. For 2010, the unallotment-based reduction for all other counties is equal to 2.41396687 percent of the county’s 2009 revenue base. Reductions are applied first to CPA and then, if necessary, to MVC reimbursements.

For 2009 and 2010, cities with a population of less than 1,000 are exempt if their adjusted net tax capacity per capita is below the statewide average. The City of St. Charles is also exempt for 2009 only. For 2009, the unallotment-based reduction for all other cities is 3.3127634 percent of the city’s 2009 revenue base, limited to $22 per capita. For 2010, the unallotment-based reduction for all other cities is 7.643803025 percent of the city’s 2009 revenue base, limited to $55 per capita. Reductions are applied first to LGA and then, if necessary, to MVC reimbursements.

For 2009 and 2010, townships with a population of less than 1,000 population are exempt if their adjusted net tax capacity per capita is below the statewide average. For 2009, the unallotment-based reduction for all other towns is 1.735103 percent of the town’s 2009 revenue base, limited to $5 per capita. For 2010, the unallotment-based reduction for all other towns is 3.660798 percent of the town’s 2009 revenue base, limited to $10 per capita. Reductions are applied to reduce the market value credit reimbursements.

The 2009 unallotment-based reductions have not changed from the original unallotments and can be found below:

The 2010 unallotment-based reductions have changed only to the extent that the amount of market value credit reimbursements available to be cut has changed in the final reported reimbursement amounts compared to the estimated amounts identified previously. These reductions are provided below with the additional 2010 reductions.

Calculation of Additional 2010 Reductions

In addition to the unallotment-based reductions for 2010, additional reductions for counties and cities are provided for 2010 and calculated as a percent of 2010 revenue base. For counties, the revenue base is equal to certified levy plus certified county program aid (CPA) plus taconite aid. For cities, the revenue base is equal to the certified levy plus certified local government aid (LGA) plus taconite aid.

For counties, additional reductions are equal to 1.82767 percent of the county’s 2010 revenue base. No counties are exempt. Unlike the unallotment-based reductions, additional reductions are applied first to MVC reimbursements and then, if necessary, to CPA.

For cities, additional reductions are equal to 3.4287 percent of the city’s 2010 revenue base, limited to $28 per capita. No cities are exempt. Unlike the unallotment-based reductions, additional reductions are applied first to MVC reimbursements and then, if necessary, to LGA.

The 2010 unallotment-based and additional reductions can be found below: 

2010 MVC Reimbursement Cuts Made Permanent

The 2010 Legislature also made the unallotment-based 2010 reduction amounts under Minn. Stat. § 477A.0132 permanent (under Minn. Stat. § 273.1384, subd. 6), meaning that this portion of the 2010 MVC reimbursement reductions will also be reduced from credit reimbursements paid in future years. The additional reductions are not included in this permanent reduction.