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S.F. No. 813 - Modifying LGA Formula & Transition Factors
Author: Senator Julie A. Rosen
Prepared By: Eric S. Silvia, Senate Counsel (651/296-1771)
Date: February 27, 2017


Section 1. City revenue need. Modifies the transition formula used when cities increase in population and therefore move from one need formula to another. This section increases the threshold from 10,500 to 11,000 for cities that move from a medium to a large-sized city, and adds a new factor of 0.1 percent times the amount that the city’s population exceeds the minimum threshold. Effective for aids payable in calendar year 2018 and thereafter.

Section 2. City formula aid. Specifies that for aids payable in 2018 and thereafter, the formula aid for a city is equal to the product of (i) the difference between its unmet need and its certified aid in the prior year before any statutory aid adjustment and (ii) the aid gap percentage. Current law looks at the city’s formula aid, rather than certified aid, in the previous year. A city’s formula aid does not take into account any limits on annual decreases. Effective for aids payable in 2017 and thereafter.

Section 3. City aid distribution. Provides that in 2018 and thereafter, if a city’s certified aid before any statutory aid adjustment for the previous year is less than its unmet need, the city shall receive a distribution equal to the sum of: (i) its certified aid in the previous year before any aid adjustment; (2) the city’s formula aid; and (3) its aid adjustment.

If a city’s certified aid before any statutory adjustment for the previous year is equal to or greater than its current unmet need, the total aid is equal to the greater: (1) its unmet need plus any aid adjustment; or (2) the amount it was certified to receive in the previous year minus the lesser of $10 multiplied by its population, or five percent of its net levy in the prior year. No city may have a total aid amount less than zero. Effective for aids payable in calendar 2018 and thereafter.

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