2007-01-06_PR Comm Packet - Laserfiche WebLink

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Conclusions and Recommendations The Department of Revenue's report contained the following conclusions and recommendations. a) The local sales tax plays a valuable, but supporting role in the larger picture of state and local government financing. b) The local sales tax is best used as a mechanism for the financing of large, special, multi - jurisdictional capital projects rather than as a funding replacement for general operating expenses. c) The current process for authorizing new local option sales taxes is widely perceived to be subjective and political. d) Objective criteria and a more straightforward process for consideration should be developed. e) Criteria for approval should include a demonstration that the property tax and state aid is insufficient to adequately fund the capital project. i) A proposal should be considered stronger if it came from a multi -jurisdictional compact. g) Local approval via a referendum should be known before submitting a proposal to the Legislature. h) Authorization for a local sales tax should remain with the Legislature. Final Comments Based on the findings and recommendations contained in the Department of Revenue's report, the City of Roseville could pursue the idea of enacting a local sales tax in Roseville. Roseville's economic base places it in a strong position to capitalize on such an action, without dramatically impacting residents. However, as is reflected above, a number of challenges would exist in gaining approval from the Legislature. For the curious, if Roseville were to enact a half -cent (0.5%) local sales tax, it would receive approximately $5 million annually. For comparison purposes, this represents approximately 15% of our total budget. This amount would also support the principle and interest costs of a $55 million bond issue at today's interest rates. 4