Date: October 8, 2004
To: All Municipal Officials
From: Susan J. Cave, Executive Director
During the summer, you received a package of information from us regarding cuts and freezes that have been imposed on the state local government funds (Local Government Fund, Local Government Revenue Assistance Fund and the Local Government and Library Support Fund). The information pointed out many valuable and essential services the local government and library support funds make possible. Everyday services rely on the state's continued support of the local government funds in the state budget.Recently, the state Department of Taxation released new numbers which estimate the total number of dollars lost through the freezes and cuts are less than the $673 million over four years we suggested in the information we provided to you. While we may disagree with the Department's estimate and what should or should not be included in the estimate, we do not wish the discussion to deteriorate into a "numbers game" The essential point is that the local government funds are an important issue. To that end, we will use the Department's estimate of $340 million in losses to these funds over the past and recent biennium. The number used does not change the damage done to the local and library services in the last two biennial budgets.Nor, and more to the point, does the figure change the further problems that will be created if the state does not return the local government funds to the statutory formulas in permanent law. Under those formulas, support for local governments and libraries grows or lessens depending on the growth or lack of it in state revenue. The Department of Taxation's own figures show that in FY 2002, had the state not frozen the local government fund receipts, local governments and libraries would have received almost $14 million less in state aid because the state's revenues went down. The formulas have always worked well for the state and local governments and libraries.
We urge you to continue talking to your members of the General Assembly about the importance of the local government funds to your community. That is the most important story you can tell. Crucial to the discussion of this issue is the local story of important, everyday services not whose numbers statewide are more correct.
