Cities and towns need dependable and consistent revenue sources to support the efficient and effective delivery of municipal services that residents and businesses demand for a positive quality of life and economic prosperity. This formerly stable revenue source has not only been reduced in dollars in recent years, but the formula that determines the distribution of the dollars is also being challenged.
The legislature passed H3137 in 2019 requiring the Local
Government Fund beginning in FY 2021 to increase or decrease by the same
percentage as the state general fund is projected to increase or decrease, not
to exceed 5% compared to the appropriation in the current fiscal year.
Funding based on forward-looking revenue projections rather than the prior
year’s revenues should prove more reliable. A more reliable Local Government
Fund formula was one of the Municipal Association’s 2019 Advocacy Initiatives.