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<br /> <br /> STAFF REPORT <br /> <br /> <br /> <br />TO: Mayor Keis and Members of City Council <br /> FROM: Chris Heineman, City Administrator <br /> <br />DATE: March 13, 2019 <br /> <br />RE: Letter of Support for Motor Vehicle Sales Tax Amendment <br /> <br />ACTION TO BE CONSIDERED: <br />Motion to support House File 2194 and Senate File 2087 related to allocation of revenue from the <br />Motor Vehicle Lease Sales Tax. <br /> <br />BACKGROUND: <br />In 2015, state legislation was passed to reallocate $32 million of the sales tax collected from leased <br />vehicles from the State of Minnesota General Fund to counties throughout Minnesota. The allocation <br />was divided 50% to greater Minnesota and 50% to metro counties via the County State Aid Highway <br />(CSAH) fund. In an effort to balance funding for transit and roads/bridges, the law excluded Hennepin <br />and Ramsey counties from receiving their percentage of funding. Instead, the other five metro-area <br />counties split the proceeds from motor vehicle lease sales taxes that were generated in Hennepin and <br />Ramsey counties. <br /> <br />With the elimination of the CTIB Board in 2017, all seven metro counties now collect their own local <br />transportation sales tax. The attached bills (HF 2194 and SF 2087) intend to eliminate the exemption <br />of Hennepin and Ramsey counties and to distribute the sales tax on leased vehicles, per the county <br />state aid formula, to all metro counties. The current practice of distributing sales tax proceeds from <br />Hennepin and Ramsey County to the other five metro counties puts cities at a disadvantage when it <br />comes to accessing funds for county road and bridge projects such as the proposed County Road D <br />reconstruction project. <br /> <br /> <br />RECOMMENDED ACTION: <br />Staff recommends approval of a motion to support HF 2194 and SF 2087 related to allocation of <br />revenue from the Motor Vehicle Lease Sales Tax.