03-08-2006 Council Agenda - Laserfiche WebLink

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C446/ v7- �... ,n 25a74 ceemack JVIAYOR Bill Blesener COUNCIL Jim LaValle Rick Montour Barbara Allan John Kris 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www.ctlittle-canada.mn.us MEMORANDUM TO: Mayor Blesener & Members of the City Council FROM: Joel Hanson, City Administrator DATE: March 3, 2006 RE: MVST Resolution In the upcoming fall elections, voters will be asked to approve a constitutional amendment to dedicate all existing Motor Vehicle Sales Tax (MVST) to transportation purposes. Currently, about 54% of the MVST is used for transportation projects. During the 2005 Legislative Session, the amendment was approved for the ballot in 2006. If approved, it would call for the funds to be phased in over five years beginning in 2007. When completed in 2011, the transfer would provide more than $300 million per year for transportation. There would be no increase in the existing 6.5% tax collected on the sales of all new and used motor vehicles. The Legislature, during the late 1980s, dedicated MVST revenue to highways and transit, intending that the money supplement other transportation funding. However, this dedication was periodically changed or suspended due to shortages in the general fund. It was abolished entirely beginning in Fiscal Year 1992. From then until 2001, all MVST revenue was deposited into the general fund and used for non transportation - related purposes. The current distribution of MVST revenues is: • General fund — 4625 percent. Highway user tax distribution fund — 30 percent. • County state -aid highways - .65 percent. • Municipal state -aid highways - .17 percent. • Metropolitan transit — 21.5 percent. • Greater Minnesota transit — 1.43 percent. Of the 54 percent that is dedicated to transportation, about 55 percent goes to highways and 45 percent to transit.