10/09/2000 Council Packet - Laserfiche WebLink

Home Search

AGENDA ITEM �--I- R STAFF ORIGINATOR: Al Rolek, Finance Director MEETING DATE: October 9, 2000 TOPIC: Resolution Authorizing a Tax Rate Increase for 2001 VOTE REQUIRED: Simple Majority (3/5) BACKGROUND: The Minnesota Legislature passed a law during the 1999 legislative session which requires local governments to hold a public hearing and adopt an authorizing resolution if the tax rate of the jurisdiction for general purposes, excluding general obligation debt, will increase for the coming year. This is calculated based on a formula prescribed by the Minnesota Department of Revenue. The prescribed formula creates a "theoretical" tax rate for the previous year and does not allow for growth in the city's tax base; therefore, except in rare instances, any increase in general tax levy dollars will result in a tax rate increase for the coming year. Even if the City Council reduces the tax levy to achieve no increase in the tax rate, as has been discussed, according to the prescribed formula, the tax rate for Lino Lakes will increase in 2001. Therefore, Council must adopt the authorizing resolution. Should Council not adopt the resolution, the tax rate will revert to the same theoretical rate as in 2000, which would leave the City in a serious financial shortfall situation for the 2001 budget year. OPTIONS: 1) Following the public hearing, adopt Resolution 00 -98 authorizing an increase in the tax rate for taxes collectible in 2001. 2) Following the public hearing, do not adopt Resolution 00 -98. RECOMMENDATION: Option 1.