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37 2) City License and Passport Center at a cost of $12,7000 38 39 Last year, the City also requested sales tax funding for a pedestrian Bridge over Hwy. 36 west of 40 Snelling Ave. The pedestrian bridge has been dropped as part of this request due to the higher costs 41 for the Maintenance Facility and License Center. 42 43 To fund these project improvements as well as the debt issuance and interest costs, staff is proposing 44 the Cityrequest the Legislature approve a 0.5% local option sales tax subject to approval by voter 45 referendum approval for a period of 20 years in Roseville. According the Minnesota Department of 46 Revenue, it is estimated that a 0.5% sales tax in Roseville will generate $5.4 million annually based 47 on 2019 sales figures. Over 20 years, the sales tax will raise an estimated $108 million dollars which 48 will be sufficient to cover all of the two projects and debt issuance and interest costs. If the project 49 costs come in lower and/or sale tax revenue exceeds our projections, the debt and sale tax authority 50 will expire earlier. 51 For the City Council’s information, Attachment A shows a listing of the local sales tax rates within 52 the Twin Cities metro area and selected cities in Minnesota. 53 54 Staff has included a draft resolution (Attachment B) based off of the League of Minnesota Cities 55 model resolution that has been updated with the current projects and the amount of sales tax 56 proposed to be collected. Attachment C contains documentation of regional significance for each 57 project that the City is proposing to be funded via the sales tax. This documentation will be included 58 with the resolution sent to Legislators. 59 P OLICY O BJECTIVE 60 The creation of a local sales tax for Roseville will more closely distribute the cost borne by Roseville 61 taxpayers for regional transportation infrastructure supporting Roseville’s business community. 62 B UDGET I MPLICATIONS 63 Not directly applicable at this time. Approval of a local sales tax will lead to additional dollars being 64 available for city capital projects. 65 R ACIAL E QUITY I MPACT S UMMARY 66 A sales tax is generally considered one of the most regressive taxes, meaning that people of lower 67 incomes pay a larger percentage of their income for sales taxes. The Institute on Taxation and 68 Economic Policy’s report “Taxes and Racial Equity – An Overview of State and Local Policy 69 Impacts” states the following regarding the impact of sales taxes: 70 71 Consumption taxes, most notably general sales taxes, are the most regressive type of taxes 72 relied on by state and local governments and the most significant drivers of racial inequity in 73 state and local tax codes. Low- and middle-income families pay a larger share of their 74 incomes in consumption taxes than the rich. While most low-income taxpayers are white 75 because they remain a majority of the U.S. population, a disproportionate share of Black, 76 Hispanic, Indigenous and other households of color are in lower-income groups due to the 77 legacy of racist public policies and ongoing discrimination. So, policies that disadvantage 78 low-income individuals and families—like heavy reliance on sales and excise taxes—have a 79 disproportionately negative effect on people of color. 80 81 The Executive Summary of the report is included as Attachment C. 82 Page 2 of 3