06-11-1991 Council Agenda - Laserfiche WebLink

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Consequences of not imposing the local option sales tax If your county decides not to impose the local option sales tax for any year, the city, town, county and special taxing district governments within your county will not receive payment of state aids in the following year for: • homestead and agricultural credit aid (HACA) • disparity reduction aid and attached machinery aid • homestead and agricultural credit guarantee • supplemental homestead credit • disparity reduction credit • 25 percent of the base aid for county human service programs • local government aid and equalization aid If the local government aid to a city, town or county, or the aid for human service programs and the attached machinery aid to a county is reduced or eliminated because a county board decides not to impose the local option sales tax, counties, cities and towns are authorized to increase their levy limits to make up for the loss of these aids. The loss of the other aids and credits listed above is automatically made up through higher property taxes. Revenue from the local option sales tax will be deposited in a new trust account dedicated to the payment of state aid -- the local government trust fund. In addition, the law provides for the depositing of 25 percent of the revenue raised from the six percent state sales tax rate into the fund. Reversing the decision of the county board To reverse the decision of a county board to impose or rescind the tax, the city councils and town boards of cities and towns whose populations make up a majority of the county's population must adopt resolutions to impose a tax rescinded by the county, or rescind a tax imposed by the county. Also, in cases where your county board never takes action to impose the tax, city councils and town boards can vote to impose it. The decision of the cities and towns affects the entire county. Cities and towns must enact their resolutions no later than August 1. The county auditor must notify the Commissioner of Revenue of the decision of the cities and towns. In addition, beginning in 1993, voters can elect to rescind the tax imposed by their county. To rescind the tax, voters must begin by filing a petition with the county signed by at least ten percent of the voters in each city and town in the county. This requires the county to put the issue on the ballot at the next general election. To rescind the tax, a majority of the voters voting on the issue must vote to rescind. If you have questions, please call Rich Gardner of the Department's Local Government Services Division at (612) 296 -3155. Si cerely, ,fi(1,6c { Dorsthy/ fricClung Com iss over Page 45