Paul metropolitan area was established by the Fiscal Disparities Act of 1971, and the sate legislation implemented it in 1975. Under the Act s requirements, a local jurisdiction compares its commercial and industrial property values with its 1971 assessment for those properties. Forty percent of the increase over the 1971 assessment is put in a metropolitan pool, which is then redistributed according to each community s population and overall tax base. When the program began, Minneapolis and St. Paul were the major beneficiaries. Minneapolis is now a net contributor due to the successful redevelopment of its downtown, and St. Paul s redevelopment efforts have reduced its dominance of the recipient pool.
Small communities are now the major beneficiaries of the program.