Agenda - Environmental Policy Board - 06/17/2008

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~"lH TRUST (~ PU'BLlC LAND ;t'tt:li&tlW RAMSEY CITY, MINNESOTA Feasibility Study . Provides a large pool of funding which allows immediate purchase of land while it is still available, and presumably at a lower price than in the future. . Distributes the cost of acquisition over time so that future beneficiaries also share in the burden. Disadvantages . Interest on debt increases total costs. . Funds may only be used for capital improvements (e.g. acquisition of park land, construction of park improvements) and not for on-going monitoring and maintenance.39 Other Potential Funding Mechanisms Local Sales Tax Under :Minnesota law, the state legislature must specifically authorize the imposition of any local sales tax. Before seeking legislative approval, the governing body - in this case, the city council - must adopt a resolution in support of the tax, including information on the proposed tax rate, how the revenues will be used, the total amount to be raised before the tax expires, and its estimated duration. If authorized by the legislature, the question must be put to a vote at a general election', which may be either a state or local general election. The enabling legislation may allow other methods of local approval. For instance, laws authorizing the :Minneapolis, St. Paul, Bloomington, and Rochester (first authorization) sales taxes provided that the city council could impose the tax by ordinance, without a local ballot measure.40 A local sales tax in Ramsey could potentially generate substantial revenues for parks and land conservation. However, state law prohibits the imposition of any local sales tax without specific legislative authorization. Very few of :Minnesota's local governments have been granted authority to levy a local tax. According to the :Minnesota Chamber of Commerce, currently, 20 local governments exercise the authority given to them by the Legislature. They are Albert Lea, Austin, Baxter, Bemidji, Brainerd, Duluth, Hennepin County, Hermantown, Mankato, :Minneapolis, New UIm, Owatonna, Proctor, Rochester, the St. Cloud area (St. Cloud, St. Joseph, Sartell and Sauk Rapids), St. Cloud, St. Paul, Two Harbors, and Willmar.41 Before seeking legislative approval, the governing body (city council, county or township board) must adopt a resolution in support of the tax. It must include information on the 39 Minn. Stat. 475.52 and 475.65 authorize the use of bond proceeds for the "acquisition and betterment" of property and equipment. Also, IRS rules governing tax-exempt bonds limit the use of proceeds to capital purposes. 40 Excerpted from: Minnesota Local Sales and Use Taxes: a report to the 2004 Legislature, http://www.taxes.state.mn.us/taxes flegal_policy / research_reports / content/local_sales_ tax_study. pdf 41 http://taxes.state.mn.us/sales/publications/faccsheets_by_name/content/BAT_ll00ll1.pdf 21