HomeMy WebLinkAbout5.F.8. Metro Wide Sales Tax-Transportation
CITY OF SHAKOPEE s: F, ~..
Memorandum
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TO: Mayor and City Council ~- .~
FROM: Mark McNeill, City Administrator
SUBJECT: Metro Wide Sales Tax - Transportation
DATE: February 15,2007
INTRODUCTION:
The Council is asked to endorse a legislative bill which is being proposed by the Metro
Cities Association (formerly AMM) which, if approved, would allow voters to decide on
whether or not to add a one-half cent sales tax in the Metropolitan Area. The proceeds
from the tax would be dedicated towards transportation and transit projects in the seven
county metropolitan area.
BACKGROUND:
The Metro Cities Association has asked that cities consider endorsing a legislative
proposal which will be introduced shortly, in both the House and the Senate. If
approved, voters would be asked to decide in November, 2008, about whether a one-half
cent sales tax should be imposed for a 20 year period of time (to expire 2029) to pay for
transportation and transit improvements in metro area.
The eligible transportation projects could include freeways, highway bridges, city streets
or county roads, and transit improvements.
At its February 6th meeting, the City Council adopted a resolution which endorsed the
concept of a wide variety of transportation funding improvements, all of which would be
needed to start to address an estimated $1.5 billion shortfall statewide which is needed
over the next 10 years for already identified projects. When the Council approved that
resolution, it emphasized the need for special consideration to be given to accelerating
transportation improvement projects in our area, specifically the grade separation at
494/169, and the new Minnesota River Crossing, near the TH 41 alignment.
Sales tax has been noted as being perhaps even more important to our specific region
than would a gasoline tax increase. For example, in Scott County, a 10 cent per gallon
gasoline tax increase would cost Scott County taxpayers $5.8 million, but with the
current County State Aid Highway funding distribution system, only about $700,000 of
that would be returned to Scott County. If approved by voters, a one-half cent sales tax
imposed on the metro area that would be dedicated towards transportation and transit
projects, would stay in the metro area.
Specific distribution of that monies would be determined by Joint Powers Board, which
would be composed of one representative of each county, and one City representative
from each county in the metro area. The effect of this is that Scott County would have an
equal voice in the determination of where this money goes. (Scott County being on the
same footing as, for example, Hennepin County, is unusual in any other distribution
formula.)
BUDGET IMPACT:
The half-cent sales tax on retail sales in the Metropolitan area would generate an
estimated $220 million annually.
While this would be a tax increase, it is something for which voters would be the final
judge. Passage of this bill into law would merely allow the referendum to take place.
RELATIONSHIP TO VISIONING:
This supports Goal D. - Vibrant, resilient and stable.
RECOMMENDATION:
I recommend that, in view of the very pressing transportation and transit needs in the
Metropolitan area, the Council endorse the transportation sales tax option.
ACTION REQUIRED:
If the Council concurs, it should, by motion, endorse the concept of a local transportation
sales tax option to be placed on the November, 2008 ballot to be decided by Metropolitan
area voters, and, if approved.
/fAQ IttLiw/!
Mark MeN eill'
City Administrator
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METRO CITIES
Metropolitan Area Sales Tax for Transportation and Transit
Section 1: Highway spending in the Metro Transportation District. Requires that the percentage
of total trunk highway funds in the metropolitan transit area not vary more than two percentage points
from the average of the previous five years' expenditures.
Section 2: Existing Law
Section 3: Metro Area. This section defines the metro transportation district as the seven county
metro area, has special election requirements for a referendum, and requires the joint powers board to
levy the tax if approved by a majority of the voters. Creates a Metro Transportation Fund and outlines
the Joint Powers Board and agreement.
Allocations of funds. Provides for the allocation of funds for metropolitan transportation highway
projects, Met Council public transit components, construction, maintenance and improvement oflocal
roads, operation of and capital assistance to public transit systems owned, operated or contracted for
by a county, and one or more cities in the county.
Greater Minnesota. This section also provides for a Greater Minnesota Joint Powers Board for the
purposes of imposing a sales tax increase if approved by the voters, with the tax dedicated to regional
transportation projects and for the administration, collection, and enforcement of all taxes imposed
under this section.
Report to the Legislature. The section mandates a report by the Joint Powers Board to the
Legislature regarding the allocation and expenditures of funds received from the metropolitan area
sales tax and the allocation and expenditures of that money.
Section 4: Appropriations for the general election. Provides for the level of appropriation for the
costs of the special election described in Section 3.
Section 5: Effective Dates. The tax will begin to be collected January 1, 2009 after the general
election, and expires January 1, 2029.
SF 5 HF 23 - Differences (FVt>M Me.-tvo C;ties' Prof'6SCLl)
Article 8 - Local Transportation Sales Tax
Section 1: Same
Section 2:
Subd. 1 - Outlines Metropolitan Transportation Area and the Joint Powers Board
Subd. 2 - Allows the joint powers board to impose the tax on the metropolitan transit area.
Subd. 3 - 50% of the money goes to MnDOT 50% of the money goes to the Met Council and
Greater Minnesota Transit.
Subd. 4 - One or more counties outside the Metro acting within a joint powers board imposing the tax
if it passes by a referendum.
Section 3: Report to the Legislature
Section 4: Effective Date
Metro Cities: Sarah Erickson sarah@amm145.org 651-215-4003 (0) 651-303-0990 (c)
02/06/2007 02: 11 PM COUNSEL /RER SC5094-3
1.1 A bill for an act
1.2 relating to transportation; requiring referendum to impose a 0.50 percent
13 metropolitan area sales tax for transportation and transit in the metropolitan
1.4 area; authorizing imposition of county sales taxes for transportation purposes;
1.5 appropriating money; amending Minnesota Statutes 2006, sections 161.04, by
1.6 adding a subdivision; 297 A.94; proposing coding for new law in Minnesota
1.7 Statutes, chapter 297 A,
1.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2006, section 161.04, is amended by adding a
1.10 subdivision to read:
1.11 Subd. 5. Highway spending in metropolitan transportation district. In any year
1.12 during which taxes authorized in section 297A.992, subdivision 3, are imposed, and
1.13 exclusive of the expenditure of these revenues, the percentage oftotal trunk highway fund
1.14 expenditures attributable to projects in the metropolitan transportation area, within the
1.15 meaning of section 297 A.992, subdivision I, may not vary more than two percentage
1.16 points from the average of the previous five years of trunk highway fund metropolitan
1.17 transportation area expenditures.
1.18 Sec. 2. Minnesota Statutes 2006, section 297 A. 94, is amended to read:
1.19 297 A.94 DEPOSIT OF REVENUES.
1.20 (a) Except as provided in this section, the commissioner shall deposit the revenues,
1.21 including interest and penalties, derived from the taxes imposed by this chapter in the state
1.22 treasury and credit them to the general fund.
1.23 (b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
1.24 account in the special revenue fund if:
Sec. 2. 1
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2.1 (1) the taxes are derived from sales and use of property and services purchased for
2.2 the construction and operation of an agricultural resource project; and
23 (2) the purchase was made on or after the date on which a conditional commitment
2.4 was made for a loan guaranty for the project under section 4lA.04, subdivision 3.
2.5 The commissioner of finance shall certify to the commissioner the date on which the
2.6 project received the conditional commitment. The amount deposited in the loan guaranty
2.7 account must be reduced by any refunds and by the costs incurred by the Department of
2.8 Revenue to administer and enforce the assessment and collection of the taxes.
2.9 (c) The commissioner shall deposit the revenues, including interest and penalties,
2.10 derived from the taxes imposed on sales and purchases included in section 297A,61,
2.11 subdivision 3, paragraph (g), clauses (I) and (4), in the state treasury, and credit them
2.12 as follows:
2.13 (I) first to the general obligation special tax bond debt service account in each fiscal
2.14 year the amount required by section l6A.66l, subdivision 3, paragraph (b); and
2.15 (2) after the requirements of clause (I) have been met, the balance to the general
2.16 fund.
2.17 (d) The commissioner shall deposit the revenues, including interest and penalties,
2.18 collected under section 297 A.64, subdivision 5, in the state treasury and credit them to the
2.19 general fund. By July 15 of each year the commissioner shall transfer to the highway user
2.20 tax distribution fund an amount equal to the excess fees collected under section 297 A.64,
2.21 subdivision 5, for the previous calendar year.
2.22 (e) For fiscal year 2001,97 percent; for fiscal years 2002 and 2003,87 percent; and
2.23 for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
2.24 penalties, transmitted to the commissioner under section 297A.65, must be deposited by
2.25 the commissioner in the state treasury as follows:
2.26 (I) 50 percent of the receipts must be deposited in the heritage enhancement account
2.27 in the game and fish fund, and may be spent only on activities that improve, enhance, or
2.28 protect fish and wildlife resources, including conservation, restoration, and enhancement
2.29 of land, water, and other natural resources of the state;
230 (2) 22.5 percent ofthe receipts must be deposited in the natural resources fund, and
231 may be spent only for state parks and trails;
232 (3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
233 may be spent only on metropolitan park and trail grants;
234 (4) three percent of the receipts must be deposited in the natural resources fund, and
235 may be spent only on local trail grants; and
Sec. 2. 2
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3.1 (5) two percent of the receipts must be deposited in the natural resources fund,
3.2 and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
3.3 Conservatory, and the Duluth Zoo.
3.4 (1) The revenue dedicated under paragraph (e) may not be used as a substitute
3.5 for traditional sources of funding for the purposes specified, but the dedicated revenue
3.6 shall supplement traditional sources of funding for those purposes. Land acquired with
3.7 money deposited in the game and fish fund under paragraph (e) must be open to public
3.8 hunting and fishing during the open season, except that in aquatic management areas or
3.9 on lands where angling easements have been acquired, fishing may be prohibited during
3.10 certain times of the year and hunting may be prohibited. At least 87 percent ofthe money
3.11 deposited in the game and fish fund for improvement, enhancement, or protection offish
3.12 and wildlife resources under paragraph (e) must be allocated for field operations.
3.13 (g) The revenues, including interest and penalties, collected under section 297 A.992
3.14 must be deposited by the commissioner as provided for in that section.
3.15 Sec. 3, r297 A.9921 LOCAL TRANSPORTATION SALES AND EXCISE TAX.
3.16 Subdivision 1. Definition. For purposes of this section "metropolitan transportation
3.17 area" means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
3.18 Washington.
3.19 Subd. 2. Election. The secretary of state, in cooperation with the county auditors of
3.20 the metropolitan transportation area, shall conduct a special election in the metropolitan
3.21 transportation area at the time of the general election the Tuesday after the first Monday in
3.22 November 2008. The following question shall appear on the ballot:
3.23 "Shall an additional tax of one-half of one percent be temporarily imposed on
3.24 sales in the metropolitan area to pay for transportation and transit improvements in the
3.25 metropolitan area?"
3.26 Subd. 3, Metropolitan transportation area sales tax. (a) Notwithstanding sections
3.27 297A.99, subdivisions 1,2,3,5, and 13; 477A.016; or any other law, the ioint powers
3.28 board described in this subdivision may levy a metropolitan transportation area sales
3.29 tax of up to one-half of one percent on retail sales and uses taxable under chapter 297 A
3.30 occurring within the metropolitan transportation area, if approved by a maiority of the
3.31 voters in the metropolitan transportation area who vote on the question to impose the tax
3.32 at a special election held in the metropolitan transportation area at the time of the general
3.33 election described in subdivision 2.
3.34 (b) A metropolitan transportation area fund is created in the state treasury. After the
3.35 deductions allowed in section 297A.99, subdivision 11, the commissioner of revenue shall
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4.1 deposit all revenue from taxes imposed under this section in the fund. Money in the fund
4.2 is appropriated to the commissioner of finance. The commissioner of finance shall allocate
4.3 money in the fund as directed by resolution of the joint powers board under paragraph (d).
4.4 (c) Before imposing the tax under paragraph (a), counties and cities in the
4.5 metropolitan transportation area shall enter into a joint powers agreement to create the
4.6 joint powers board to exercise the powers provided in this section. The joint powers
4.7 board must consist of one representative of each county in the metropolitan transportation
4.8 area appointed by each county board, and one city representative from each county
4.9 in the metropolitan transportation area appointed by the Association of Metropolitan
4.10 Municipalities. The joint powers board has the powers and duties provided in this section
4.11 and in section 471.59, except that the joint powers board may not issue bonds.
4.12 (d) By May I of each year, the joint powers board shall, by resolution, direct the
4.13 commissioner of finance to allocate revenue in the metropolitan transportation area fund
4.14 for the next fiscal year. The resolution must direct the commissioner to allocate funds to
4.15 the following recipients for the following purposes:
4.16 ( I) to the joint powers board as reimbursement of its expenses in carrying out the
4.17 provisions of this section;
4.18 (2) to the commissioner of transportation for metropolitan transportation area
4.19 highway projects included in the commissioner's current ten-year highway work plan;
4.20 (3) to the Metropolitan Council for implementation of the public transit components
4.21 of the council's 2030 transportation policy plan, and for other public transit operations and
4.22 capital improvements provided or assisted by the council in counties in the metropolitan
4.23 transportation area;
4.24 (4) to counties or cities in the metropolitan transportation area for construction,
4.25 maintenance, and improvement of local roads; and
4.26 (5) to counties or cities in the metropolitan transportation area for operation of
4.27 and capital assistance to public transit systems that the county, or one or more cities in
4.28 the county owns, operates, or contracts for.
4.29 Subd. 4, Tax in counties outside metropolitan transportation area.
4.30 Notwithstanding sections 297A,99, subdivisions 1,2,3,5, and 13; 477A.OI6; or any other
4.31 law, the boards of two or more counties outside the metropolitan transportation area acting
4.32 under a joint powers agreement, may impose a transportation sales tax at a rate of one-half
4.33 of one percent on retail sales and uses taxable under chapter 297 A occurring within the
4.34 jurisdiction of the taxing authority subject to approval by the voters of the county or
4.35 counties at a general election. The proceeds of the tax must be dedicated exclusively to
4.36 regional transportation projects.
Sec. 3. 4
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5.1 Subd. 5. Administration. collection. enforcement. The administration, collection,
5.2 and enforcement provisions in section 297A.99, subdivisions 4 and 6 to 12, apply to all
5.3 taxes imposed under this section.
5.4 Subd, 6. Report. In each year during the period of imposition of the taxes
5.5 authorized in subdivision 3, the ioint powers board shall report by February I to the house
5.6 of representatives and senate committees having iurisdiction over transportation policy
5.7 and finance concerning the revenues received from the metropolitan transportation area
5.8 sales tax and the allocations and expenditures of that money.
5.9 Sec. 4. APPROPRIATION.
5.10 $,....:. is appropriated from the general fund to the secretary of state for the costs of
5.11 the special election described in section 3.
5.12 Sec. 5. EFFECTIVE DATE.
5.13 Sections I; 2; and 3, are effective upon approval of the sales tax by the metropolitan
5.14 transportation area voters in the 2008 election, and the taxes authorized in section 3,
5.15 subdivision 3, are effective as to sales made on and after January 1,2009. This act
5.16 expires January 1,2029.
Sec. 5. 5