8.3. SR 09-15-2003 - Laserfiche WebLink

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MEMORANDUM Item ~ 8.3. TO: Mayor and City Council FROM: Pat Klaers, City Administrator DATE: September 15, 2003 SUBJECT: Department of Revenue Local Sales Tax Study Attached for your information is a page from the September 3, 2003 League of Cities - Cities Bulletin that discusses the Department of Revenue local sales tax study that is taking place. Over the years, the City Council has discussed the possibility of requesting special legislation that would allow Elk River to consider this possibility. The reasoning is that a sales tax referendum may be more appropriate than a property tax referendum for something like a community center or a YMCA facility that serves a larger region than just Elk River; therefore, monies to help fund the facility come from a larger area than just Elk River. Our discussion regarding this approach was mainly around the time when nme municipalities received authorization to pursue a local sales tax in the 1998 legislative session. I think that the city comment on this issue. I would like to send a letter to the Department of Revenue indicating the Elk River City Council support for retaining the local sales tax option as a way to fund specific projects over a specific period of time, or until a specific amount of money has been generated. (I don't think anyone believes that a local sales tax option is acceptable on an ongoing basis for operating expenses.) A local sales tax may also be appropriate to help fund such things as transportation improvements that would benefit an area larger than just the city. Examples that come to mind are a County Road 33 project from Highway 169 to our eastern city limits or a Main Street/Highway 169 interchange project. To eliminate local sales tax as an option for municipalities does not seem appropriate, especially when looking at the fact that the voters would have to approve the issue. S:\COUNCIL\Pat\2003\localsalestax.doc