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<br />86 larger percentage of their income for sales taxes. The Institute on Taxation and Economic <br />87 Policy’s report “Taxes and Racial Equity – An Overview of State and Local Policy Impacts” <br />88 states the following regarding the impact of sales taxes: <br />89 <br />90 Consumption taxes, most notably general sales taxes, are the most regressive type of <br />91 taxes relied on by state and local governments and the most significant drivers of racial <br />92 inequity in state and local tax codes. Low- and middle-income families pay a larger share of <br />93 their incomes in consumption taxes than the rich. While most low-income taxpayers are <br />94 white because they remain a majority of the U.S. population, a disproportionate share of <br />95 Black, Hispanic, Indigenous and other households of color are in lower-income groups due <br />96 to the legacy of racist public policies and ongoing discrimination. So, policies that <br />97 disadvantage low-income individuals and families—like heavy reliance on sales and excise <br />98 taxes—have a disproportionately negative effect on people of color. <br />99 <br />100 While still acknowledging that sales tax disproportionally impacts lower income groups and <br />101 people of color, it should be noted that Minnesota does not apply sales tax to food bought <br />102 in grocery stores and clothing. This is an important distinction since the exemption helps <br />103 individuals meet their basic needs regarding food and clothing without paying an additional <br />104 tax. However, it is clear that sales taxes, along with property taxes, and income taxes <br />105 continue to disproportionally affect lower income groups and persons of color. Changes at <br />106 the state and federal level regarding tax policies will be needed to fully address these <br />107 inequities. <br />108 <br />109 <br />110 Budget Implications <br />111 There are no direct costs to have Ramsey County place the sales tax referendum <br />112 questions on the ballot. <br />113 <br />114 Staff Recommendations <br />115 The City Council should review the proposed sales tax referendum questions and indicate <br />116 the preferred wording for each question. Staff will bring forward a formal resolution <br />117 approving the ballot questions to the July 22, 2024 City Council meeting. <br />118 <br />119 Requested Council Action <br />120 Provide direction for the preferred wording for each sales tax referendum ballot question to <br />121 bring back for formal approval at the July 22, 2024 City Council meeting. <br />122 <br />123 <br />Patrick Trudgeon, City Manager (651) 792-7021 pat.trudgeon@cityofroseville.com <br />Prepared by: <br />1. Proposed Sales Tax Referendum Questions <br />Attachments: <br />124 <br />Page 3 of 3 <br />Qbhf!96!pg!99 <br /> <br />