2010-03-23_PWETC_AgendaPacket - Laserfiche WebLink

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Public comments counties. This view is prevalent among, though not confined to, jurisdictions with a low property tax base and those with relatively high overburden due to tourism or the regional center nature of their community. A second group feels quite strongly that a local sales taxis properly limited to funding for unusual capital projects that are vital to the region but cannot be supported through other fmancing mechanisms. Yet others are uncertain that local sales taxes are anything more than an attempt by the "haves" to get more at the expense of the "have nots:"These communities tend to be smaller cities or suburbs with a limited retail base that could be overshadowed by larger neighbors with significant potential for retail sales tax capacity. While the majority of the comments fell into the second category, there was no unanimity on the appropriate role of local sales tax as a revenue tool. Issues Raised by Prospect of Broader Local Authority The third category of issues brought out by the public meetings is a catch-all of cautions to be considered if it becomes the policy of the state to expand the current role of local sales taxes. Broader local authority The first issue is one of equalization between communities that have significant capacity for local sales tax revenue and those that do not. Many of those without significant capacity for local sales tax revenue also have a very limited property tax base. Significant expansion of the local sales tax as a revenue mechanism could lead either to the problem of "winners and losers" or to increased pressure on the state legislature to expand funding for local government aid or development of a new fiscal disparity equalization mechanism. A caution was raised concerning the possibility of criteria for authorization based on a net tax capacity measure. There were mixed feelings about whether there should be criteria that limit local authority to those communities that lack other revenue capacity. In general, there was sentiment that such a criterion might be useful if the local sales tax was to be used for general revenue purposes but not if used for "significant capital projects:' There was little support for reducing state aids for communities that have authority for a local sales tax. General support existed for criteria requiring passage of a referendum prior to authorization. There was no support expressed for a reverse referendum if an initial referendum passed. However, several witnesses endorsed the idea of an expiration date after which further authorization and referendum would need to be obtained. A return to the voters and to the authorization process was also suggested for shifts of a tax from one project to another upon completion of the first project. It was also suggested that for local taxes that would be paid primarily by those who live outside the taxing jurisdiction, the referendum be a regional one rather than confined to the taxing jurisdiction. Considerable comment was made regarding the need to encourage cross-border cooperation on regional projects. The suggestion was offered that criteria might favor multi-jurisdictional applications and projects of a regional benefit. A caveat, however, was that no one seems to have the same view of "regional benefit," or even of what a definition for region might be. 16