IV.4. Resolution Supporting Motor Vehicle Lease Sales Tax Allocation to Hennepin County; Stanley March 19, 2019 Council Report 2019-029
MOTOR VEHICLE LEASE SALES TAX ALLOCATION TO HENNEPIN COUNTY
Proposed Action
Staff recommends the following motion: Adopt Resolution 2019-023, Resolution Supporting
Motor Vehicle Lease Sales Tax to Hennepin County.
Overview
In 2015, state legislation was passed to reallocate $32 million of the sales tax collected from
leased vehicles from the State’s general fund; 50% to Greater Minnesota Transit and 50% to
metro counties through the County State Aid Highway (CSAH) Fund. In an effort to balance
funding for transit and road/bridge projects, the new law excluded Hennepin and Ramsey
counties from receiving their percentage of this funding. Instead, the other five metro counties
split the proceeds generated in Hennepin and Ramsey counties. With the elimination of the
Counties Transit Improvement Board (CTIB) in 2017, all seven metro counties now collect their
own local transportation sales tax and spend the proceeds on their own transportation projects,
with each having equal opportunity for funding.
The return of the Motor Vehicle Lease Sales Tax (MVLST) revenue to Hennepin County and
distributing per the County State Aid formula amongst all metro counties is vital for the metro
area transportation network. The change would provide an estimated $10.7 million in annual
funding to Hennepin County to be used on road, bridge, pedestrian, and bikeway projects.
Supporting Information
Motor Vehicle Lease Sales Tax Fact Sheet
Resolution 2019-023
_________________________________
Nate Stanley, P.E.
City Engineer
Financial Impact: N/A Budgeted: Y/N _N/A___ Source: _N/A
Related Documents (CIP, ERP, etc.): _______________________________
Notes: ____________________________
October 2018
Motor Vehicle Lease Sales Tax
Hennepin and Ramsey counties deliberately
excluded from metro-wide transportation funding
Minnesota’s general sales tax applies to long-term motor vehicle leases — the motor vehicle lease sales tax (MVLST). Hennepin County residents
contribute substantially to the MVLST but the county is excluded by state law
from receiving funding from this transportation source. If included, Hennepin County would receive $10.7 million annually for roads, bridges, and
pedestrian and bikeway projects.
Transportation funds critical to all counties including Hennepin
The economic strength and competitiveness of our state and region depend
on an effective, efficient and well-maintained transportation system. County
roads and bridges are a critical component of the state and regional
transportation system, and no county should be excluded from a key revenue
source for keeping pace with the escalating costs of maintaining our
transportation infrastructure.
Previous rationale for Hennepin exclusion has ceased to exist
In 2006, voters overwhelmingly supported a constitutional amendment to dedicate the MVLST to transportation. Subsequent legislative action directed
the MVLST to transportation but excluded Hennepin and Ramsey counties.
The rationale to exclude Hennepin and Ramsey counties from receiving MVLST formula funds was based on enabling of new taxing authority through
the creation of the Counties Transit Improvement Board (CTIB). With CTIB’s
dissolution in 2017, this rationale for excluding Hennepin and Ramsey
counties from receiving MVLST formula funds has ceased to exist.
MVLST funds should be distributed to all seven metro counties
In FY2018, MVLST revenues are being distributed according to the following
formula:
• 11% Highway User Tax Distribution Fund (HUTDF)
• 13% MN Transportation Fund (Local Bridges)
• 38% Greater MN Transit
• 38% County State Aid Highway (CSAH) to five metro counties:
Anoka, Carver, Dakota, Scott, Washington
Contacts
Hennepin County Intergovernmental Relations
Kareem Murphy Director
Office: 612-596-9711 Cell: 612-559-5279
kareem.murphy@hennepin.us
Transportation Planning
John Doan Assistant Director
Office: 612-543-1468 Cell: 763-355-8746
john.doan@hennepin.us
Website
hennepin.us
The 38% of revenue distributed to the CSAH fund is
allocated to only five metro counties, Anoka, Carver,
Dakota, Scott and Washington, and excludes Ramsey
and Hennepin. The MVLST is distributed
proportionally based on the population in each of the
five eligible metro counties. In FY2018, nearly
$40 million was generated and distributed to the five
metro counties. If FY2018 MVLST funds were
distributed to all seven metro counties, Hennepin
County’s share would have been approximately $10.7 million. Between 2011 and 2021, an estimated $270 million in MVLST revenues will be distributed to
Anoka, Carver, Dakota, Scott, and Washington counties for use on their county roads. Since 2011,
approximately $160 million in MVLST revenues have been distributed to those five counties, and it is
anticipated that an additional $110 million will be provided by 2021.
Hennepin needs MVLST funding for essential road and bridge infrastructure
Hennepin County has more than double the center line miles, more than four times the signalized
intersections, and serves twice the vehicle miles
traveled of any of the five counties receiving MVLST revenues. Hennepin County’s 25-year construction
needs exceed $1.3 billion, based on the 2018 MnDOT
CSAH Distribution Report. When compared to the five
counties receiving the MVLST, our need is equal to
73% of the five other counties combined. MnDOT’s
estimated Money Needs for each of the seven metro
counties is shown in the chart at right.
More transportation funds generated in
Hennepin should stay in Hennepin
According to the Minnesota House Research December 2017 State Aid Report, Hennepin County
generated approximately $480 million from the Motor
Vehicle Sales Tax, Registration Tax and Fuels Tax
combined in 2014. In the same year, Hennepin County
and its 45 municipalities received $83.4 million in the
form of County and Municipal Highway State Aid. Thus,
about $400 million per year of transportation funds
generated within Hennepin County went to fund
statewide priorities.
Currently, Hennepin County receives $69 per capita in the form of County and Municipal Highway State Aid, compared to $79 per capita metro-wide and $132 per
capita statewide. 4412.553183230.5936.512.522ANOKA CARVER DAKOTA SCOTT WASHINGTON$ MILLIONSMVLST DISTRIBUTION
2011-2018 2019-2021
$469
$297
$511
$1,325
$593
$269 $274
Money Needs (in MIL)
COUNTY TRANSPORTATION NEEDS
Anoka
Carver
Dakota
Hennepin
Ramsey
Scott
Washington
$69
$79
$132
$0
$20
$40
$60
$80
$100
$120
$140
Hennepin Metro Counties Statewide
TRANSPORTATION STATE AID
PER CAPITA
Hopcivil\Resolution.Gimberline 1
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 2019-023
RESOLUTION SUPPORTING MOTOR VEHICLE LEASE SALES TAX ALLOCATION
TO HENNEPIN COUNTY
WHEREAS, Hennepin and Ramsey counties were excluded from receiving Motor Vehicle Lease
Sales Tax (MVLST) revenue due to the creation of the Counties Transit Improvement Board
(CTIB); and
WHEREAS, CTIB was dissolved in 2017; and
WHEREAS, the rationale for excluding Hennepin and Ramsey counties from receiving MVLST
revenue no longer exists; and
WHEREAS, Hennepin and Ramsey counties are a major source of MVLST revenue;
THEREFORE, BE IT RESOLVED, that the City Council of the City of Hopkins hereby supports
returning to the original intent by eliminating the exemption of Hennepin and Ramsey counties
and distributing the MVLST per the County State Aid formula for all metro counties.
Adopted this 19th day of March, 2019
By:
_________________________________
Jason Gadd, Mayor
Attest:
__________________________________
Amy Domeier, City Clerk