Tax Aids and Credits

Aids - County Program Aid

Statewide Outcome(s):

County Program Aid supports the following statewide outcome(s).

Strong and stable families and communities.

Context:

Counties across the state have varying service needs and revenue raising capacities. State payments to local governments exist in various forms to enhance local government revenue, assist in basic service delivery, and reduce property tax burdens on homeowners and/or businesses.

Funding Source: State General Fund.

Strategies:

Provide general purpose aid to counties in recognition of their revenue needs and tax base to better equalize revenue capacity.

County Program Aid (CPA) is a general purpose aid to counties that can be used for any lawful expenditure. It is also intended to be used for property tax relief by reducing the amount of revenue collected locally, through property tax or other means. Prior to 2004, counties received aid through a number of different programs. Beginning in 2004, the aid programs were combined into one general aid program.

The CPA appropriation is divided into two main pots: (1) need aid and (2) tax base equalization aid. The need aid is distributed proportionately based on a county’s measure of crime rate, poverty, and age-adjusted population. The tax base equalization aid is distributed based on a county’s population and local tax base. In general, the formula attempts to target aid to those counties with the highest need and lowest tax base.

Results:

Counties across the state are more able to offer their residents access to comparable services at a relatively similar tax cost.

Performance Measures Notes:

Percentage of counties receiving CPA compares payable year 2008 (previous) to 2010 (current).

In 2008 and 2010, 87 out of 87 counties received need aid and 81 out of 87 received tax base equalization aid.

CPA percentage of county spending is based on State Auditor county finance reports for 2008 and 2010 and computes CPA as a percentage of total current expenditures.

For additional information, visit the Revenue Department (http://www.revenue.state.mn.us/Pages/default.aspx) website and search ‘CPA’.