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RS-6. Stability of State Revenues (B) (cont'd) <br />* Broaden the sales tax base_ Broadening the sales tax base could <br />lead to more stable revenues; <br />taxes (such as <br />the provision in current law requiring an automatic increase in inc <br />and corporate tax rates when the budget reserve is forecast to fall <br />below $150 million; and <br />income or sales tax <br />RS-7. Sales Ratio Issues B) <br />Various state fortuulas consider property tax base valuation in <br />distributing aid. Sales ratios are calculated for each jurisdiction <br />by comparing actual selling prices of properties to the estimated <br />market value assigned by the assessor. These sales ratios are used to <br />equalize assessed values 5o that all local governments are treated <br />fairly and not rewarded or punished based on their assessment <br />practices. <br />Sales ratios are thus important determinants of the level of state aid <br />received by a community. Set, in small communities, there are often <br />few sales in a given class of property to permit an accurate <br />determination of a sales ratio. In these cases, a countywide average <br />is applied. The county average, howrver, may be overly i_ 'luenced by <br />sales in a larger regional center and thus may not accurately reflect <br />the experience of smaller cities. <br />RS-8. Equipment financing (B) <br />Statutory cities in Minnesota have the power to issue certification of <br />indebtedness, payable in not more than five years, to purchase capital <br />equipment (M.S. 412.301). If the amount of the certificates exceeds <br />one percent of the city's assessed valuation, a reverse referendum <br />provision applies. <br />r) <br />