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Agenda Section: 9 . 6 <br /> OUNDS it <br /> REQUEST FOR COUNCIL CONSIDERATION Report Number: 91 -32C <br /> Report Date: J U 112 1 O , 19 9 1 <br /> ° STAFF REPORT council Action: <br /> ❑ Special Order of Business <br /> CITY COUNCIL MEETING DATE JUNE 1 0 , 1 9 91 El PublicHearings <br /> El Pubt Ageng <br /> a <br /> Kl Council Business <br /> Item Description: RESOLUTION NO . 4087 SUPPORTING THE ENACTMENT OF THE 1 /2% <br /> LOCAL SALES TAX BY THE RAMSEY COUNTY BOARD OF COMMISSIONERS <br /> Administrator's Review/Recommendation: <br /> - No comments to supplement this report <br /> - Comments attached. <br /> Explanation/Summary (attach supplement sheets as necessary.) <br /> 5UMMARYt <br /> The 1991 Tax Bill eliminated the historical state aids to cities and counties. In the place of <br /> such aids, the Legislature adopted the provision for counties and cities to institute a 1/20 <br /> Local Sales Tax Option. The provision essentially shifts the cost of aids to cities and <br /> counties from property tax to the market driven sales tax. <br /> Implementation of the Tax Option works as follows: <br /> 1. An increase in the State sales tax of the 1/20 automatically goes into <br /> effect on July 1, 1991. The sales tax would rise from 6% to 6 1/2%. <br /> 2. If the 1/20 sales tax is to continue after December 31st, each county board <br /> must approve the tax by July 1, 1991. <br /> 3. If the board decides not to impose the tax by July 1 of this year, it will <br /> be automatically rescinded effective January 1st. A majority of the cities can <br /> override the county's decision and impose the tax. The override must occur <br /> by August 1, 1991. <br /> 4. Once-the-boar-d-has-imposed-thA *�r-ernai-ns-in-effect-until-it-acts-tO-r-esci.nd <br /> the tax or a majority of cities overrides or a majority of county residents, <br /> through a reverse referendum in November, 1992 overrides the decision. <br /> 5. If a county approves the tax, the State will commit 2% of the state's sales tax <br /> to a Local Government Trust Fund from which local government aids will be <br /> distributed in 1992 according to the current Local Government Aid Distribution <br /> Formula (with some percentage reduction for 1992). <br /> On Friday, May 31, 1991, the Governor line item vetoed distributions from this Fund for <br /> 1993. Needless to say, this issue will be revisited next January when the legislature <br /> reconvenes. <br /> 1 #v 7 4,--e- z-el <br /> RECOMMENDATION: Samantha Orduno, City Administrator <br /> Motion to Approve Resolution No. 4087 Supporting the Enactment of the 1/20 Local Sales <br /> Tax by the Ramsey County Board of Commissioners <br />