CCP 03-09-1992 - Laserfiche WebLink

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... cc ~~ I 183 University Ave. East St. Paul, MN 55101.2526 League of Minnesota Cities (612) 227.5600 (FAX: 221.0986) February 25, 1992 TO: Mayors, Managers, and Clerks ~ FROM: Donald A. Slater, Executive Director SUBJECT: 1/2 Cent Sales Tax The purpose of this memorandum is to alert cities to a proposal which could seriously affect municipal revenue in the future. The Association of Minnesota Counties (AMC) has circulated a memorandum to Minnesota county commissioners proposing that counties consider revoking the 1/2 cent optional sales tax. The memorandum reasons that counties will receive no money from the . Local Government Trust Fund for calendar year 1993 and thereafter because the legislature failed to override the Governor's line item veto of the 1991 tax act. The memorandum also states the promises of enacting legislation restoring the distribution is not a given and the Governor and the legislature may raid the trust fund to balance the state's budget. AMC advises counties to remind their legislators and the governor that the counties voted the 1/2 cent sales tax. If the counties don't receive a portion of the funds from the trust fund, there is no reason for the counties to support the tax. Finally, the AMC provides a sample resolution for counties to pass expressing the above sentiments to the Governor and the legislature. It is obvious this move is intended to exert pressure on the legislature and the Governor to produce a replacement mechanism for the vetoed portion of the tax act. AMC also seeks to protect the integrity of the Local Government Trust Fund. LMC and AMC share these objectives. However, the threat to revoke support for the trust fund is an extremely serious matter for cities, especially. without the trust fund, cities, in any county revoking the 1/2 cent sales tax, would have no local government aid, no housing and agriculture credit ... assistance, no disparity aid, no anything. The programs which existed before the creation of the trust fund really aren't there anymore and would not be reconstituted if a county opted out of the trust fund.