CR 06-034 Resolution Supporting the Constitution Amend for Motor Vehicle Sales Tax Ded to Trans
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March 21, 2006
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Council Report 2006-034
Resolution Supporting the Constitutional Amendment for Motor
Vehicle Sales Tax (MVST) Dedication to Transportation
Proposed Action
Staff recommends adoption of the following motion: Move to approve Resolution 2006-
014 supportinq the constitutional amendment for motor vehicle sales tax (MVST)
dedication to transportation
Adoption of this motion will show support by the City of Hopkins for this constitutional
amendment that will be placed on the November 7,2006 general election ballot.
Overview
In 2005, the legislature passed a proposed constitutional amendment that would
dedicate 100% of the existing motor vehicle sales tax to the highway user tax
distribution fund. Even though previous legislation dedicated money to this area,
previous administrations have taken the money away from transportation to deal with
budget shortfalls. Placing the MVST in the highway user fund through a constitutional
amendment would ensure the dedication of the funds. The League of Minnesota Cities
(LMC) and the Association of Metropolitan Municipalities (AMM) support the
amendment. AMM provided the language that is contained in the resolution.
Primary Issues to Consider
. What are the details of the proposed amendment?
. Are there any issues that make the amendment controversial or not worth
supporting?
. Does the amendment fit the City of Hopkins legislative priorities?
Supportinq Information
. Resolution Number 2006-014
~l}iu -
Rick Getschow
City Manager
Financiallmpact: N/A Budgeted: Y/N
Related Documents (CIP, ERP, etc.):
Notes:
N/A
Source:
COWlcil Report 2006-
Page 2
Primary Issues to Consider
. What are the details of the proposed amendment?
The proposed amendment would take at least 40% of the revenue generated by the
existing motor vehicle sales tax and dedicate it to transit statewide, and would dedicate
no more than 60% of the funds toward highways statewide. The conversion of money
from the general fund, where it had been previously re-routed, will take place over five
years being fully phased in by 2011.
. Are there any issues that make the amendment controversial or worth not
supporting?
There are three issues that have made this amendment controversial.
1. The amendment does not guarantee a fixed dollar amount for roads;
2. There is a concern that the public will consider the problem fixed if this
amendment is approved. AMM states that the MVST amendment will provide
only 25% of the funding necessary to maintain our current level of
congestion; and
3. The MVST dedication will create a hole in the general fund.
However, none of these issues is significant enough to oppose the amendment. While
MVST will only provide a portion of necessary transportation funding ($300 million in
additional funds compared to a $1 billion need), it represents an important first step
toward additional funding. Finally, while a hole will be created in the general fund,
MVST is a transportation tax that should be related and dedicated to transportation
uses.
. Does the amendment fit the City of Hopkins legislative priorities?
Yes. Support for the amendment is included in the Hopkins 2006 Legislative priorities.
The LMC and the AMM are supporting the amendment and are asking cities to pass
resolutions of support that could be forwarded to their agencies to support their
lobbying and communication efforts.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2006-0014
RESOLUTION SUPPORTING THE CONSTITUTIONAL AMENDMENT FOR MOTOR
VEHICLE SALES TAX DEDICATION TO TRANSPORTATION
WHEREAS, the City Council of the City of Hopkins is the official governing body of the
City of Hopkins; and
WHEREAS, Minnesota's transportation infrastructure forms the backbone of the State's
economy and has a direct impact on future economic development; and
WHEREAS, funding for highway and transit systems in Minnesota has remained
stagnant and is failing to keep pace with its growing population and growing demands; and
WHEREAS, local governments throughout the State struggle to maintain local
transportation systems while the State's gas tax has not been increased since 1988 and transit
budgets have been cut in recent years; and
WHEREAS, the Minnesota Legislature has repeatedly turned to revenue from the motor
vehicle sales tax, which has been viewed as user fee revenue, in order to fund highway and
transit systems including the dedication of 54 percent of motor vehicles sales tax for
transportation purposes; and
WHEREAS, the Legislature passed a proposed constitutional amendment during the
2005 Legislative Session that would appear on the November 7, 2006 ballot asking voters if the
remaining 46 percent of motor vehicle sales tax revenue currently used for other purposes
should be used for highways and transit systems; and
WHEREAS, passage of this amendment would mean an increase in more stable revenue
for highway and transit systems throughout the State and would raise approximately $300
million per year once the transfer of revenue is fully phased in by 2011.
NOW, THEREFORE, BE IT RESOLVED that the City of Hopkins strongly supports
passage of the proposed amendment to the Minnesota Constitution dedicating all of the motor
vehicle sales tax revenue to transportation with at least 40 percent of the revenue for public
transit assistance and not more than 60 percent of the revenue for highway purposes.
Passed and adopted this 21st day of March, 2006.
Eugene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk