06-24-1991 Council Packet - Laserfiche WebLink

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'V- ORONO CITY COUNCIL MEETING HELD JUNE 10, 1991 (|12)OPTIONAL SALES TAX CONTINUED , nooi ^ throughout the County have until August 1* 19yi» o reverse that action. He said. "If the communities representing a maiority of the population within the County adopt resolutions that go against whatever action is taken by the County Board, then the communities will prevail effective August 1, 1991, and the tax would be removed effective January 1, 1992. As it stands now, the sales tax will be raised 1/2 percent on July 1, 1991. If the County and/or cities support resolutions opposing the 1/2 percent sales tax, the tax would be removed December 31. 1991. If such is the case, the various cities and County will lose whatever aid there is." Butler stated that in reality the sales tax is not optional. Goetten agreed and expressed disappointment in the State Legislature for passing this issue to the municipal level as opposed to handling it themselves on the State level. Callahan asked Bernhardson what the City of Orono currently receiving for State Aid. Bernhardson replied, "Right now, the City of Orono does not receive any Local Aid or Homestead Credit in 1991. Part of this package is a buydown in the classification rate from 3% to 2*s% in :992, and 2% in 1993. In 1992, the City would receive an estira,?ted $91,000 which would be used to purchase that buy-dov/n. If thac money is not distributed in Hennepin County# instead of receiving that $91,000 to buy-down 1/2 a percent, that amount would be spread over the rest of the Orono City tax base. This means that anyone with taxes under 3% would increase. In 1993, under what is now the vetoed distribution formula, the City was supposed ^ receive approximately $240,000, which is to buy-down from 2%% CO 2%. It will make a significant difference if that distribution formula is used." Jabbour stated that it seems the State Legislature has no concern about the number of Minnesotans who are spending their money outside the State to avoil sales tax. There is a major loophole in the system. Butler asked Bernhardson for his recommendation regarding Council's action relative to the draft resolution. Bernhardson replied, "The Council may chose to take no stand at this point. I base that statement on information I have received indicating that the communities representing a majority Qf County population have already adopted resolutions supporting the implementation of the 1/2 percent sales tax. Based on that, the County will more than likely approve the local option sales tax." - 6 - •>33