CR 91-129 Support Local Option Sales Tax
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SUPPORT OF
ProDosed Aotion
staff recommends adoption of the following motion, move to approve
resolution number 91-73 uraing the Hennepin. County Board of
commissioners to . adopt, the 1/2 cent. 'local option sales tax.
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Approval of this motion will indicate the City of Hopkins' support for
the use of the local option sales tax as a method of reducing property
tax rates within Hennepin county and the city of Hopkins.
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The state Legislature, in its 1991 tax bill has approved a change in
the method of funding local government aids to cities and counties.
This change consists of dedicating 2% of the sales tax revenues to
local governments to write down property taxes.
The legislature, has required that counties and/or cities adopt a 1/2
cent incr~ase in the sales tax to support the 2% dedication to local
government aids. Counties failing ~6, adopt the 1/2 cent increase will
lose all of the 2% sales tax dedicated to local government aids.
Failure on the part of Hennepin County to adopt' this option would
result in an approximate loss of $1,577,262 in local government aids.
Staff is' recommending that the Council adopt the attached resolution
and forward it to the County Board of Commissioners to indicate our
support of the necessary action to adopt the l/2 cent increasje.
Primary Issues to Consider
o What is the impact on Hopkins should Hennepin County not adopt
the local option?
Both Hennepin County and the City of Hopkins would lose local
government aids. While I do not have specific figures for Hennepin
County, the impact on Hopkins would be severe. A loss of the 1.5
million dollars in aids and subsequent., replacement'ofthose aids by
tax increases is estimated to be approximately an 11% increase in the
Hopkins tax rate and a total tax rate increase of 15%.
SUDporting Doouments
o Resolution 91-73
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S1:even C. Mielke,Ci tyManager
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CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 91-73
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RESOLUTION OF SUPPORT ENCOURAGING HENNEPIN COUNTY BOARD
OF COMMISSIONERS TO ADOPT THE SALES TAX INCREASE FOR
HENNEPIN COUNTY
WHEREAS, the State Legislature has changed the method in which local
government aids are allocated to local governments, and
WHEREAS, if the local option sales tax is not adopted, the City of Hopkins will
lose $1,577,262, and .
WHEREAS, it is in the best interest of the City of Hopkins and Hennepin County
to adopt the local options sales tax in order to hold down drastic
increases in property taxes.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Hopkins hereby urges the Hennepin County Board of Commissioners to adopt the
1/2 cent sales tax by the July 1, ,1991 deadline.
Passed and adopted by the City Council of the City of HopkinS this 4th day of June,
1991.
Nelson, W. Berg, Mayor
ATTEST:
James A. Genellie, City Clerk