Explanatory Statement:
XX
The City of St. Paul is seeking approval of a local option tax that would impose an increase in tax of $2.50 per $1,000
of assessed value for five years beginning in Fiscal Year 1998-99. This tax revenue would go into St. Paul's General Fund.
Q.XXWhat is the General Fund?
A.XXThe General Fund pays all city expenditures not covered by the City's Sewer, Water, or Streets Funds, including such services as police, administration, finance and payroll, land use planning, and growth management. Sewer, Water, and Street Funds may only be used to pay for projects or services related to providing sewer, water, and streets for St. Paul. Anything else must be paid for out of the General Fund.
Q.XXHow much tax revenue does St. Paul currently receive?
A.XXCurrently, St. Paul collects yearly taxes of approximately $36,897. Of that total, $26,346 comes from two temporary bond levies. The proposed local option tax would impose an additional tax of approximately $35,259 each year for five years, for a total over the five year period of $176,298. Approval of this local option tax would add approximately $35,259 to the General Fund for each of the five years.
Q.XXWhy does St. Paul need additional General Fund revenue?
A.XXOver the past year and a half, St. Paul has been facing a number of complex issues including growth management, land use and development, public infrastructure, and resource protection. These issues are being addressed by three part-time employees, limited consultant assistance, and volunteer citizen efforts. New fees were instituted that require potential developers to pay all costs of land use review, so that potential development projects are not subsidized by taxpayers. However, many of the issues that St. Paul is facing are not specific to a particular development proposal, but affect the future of the city as a whole. At the current level of revenue, St. Paul cannot afford to respond to these issues. St. Paul has already completely exhausted its General Fund for the 1997-98 fiscal year, as of the beginning of March, which is four months before the end of the fiscal year.
Q.XXWhat would the proposed local option tax be used for?
A.XXThe local option tax revenue would cover the cost of additional land use planning, public works, city management, legal, engineering, and other support services that are necessary to permit St. Paul to respond adequately to these issues. St. Paul is now in the midst of periodic review of the city's Comprehensive Plan. This review is required by the state, and must be completed. One main purpose of the tax increase is to fund the services necessary to finish periodic review.
Submitted by:
Barbara Boedigheimer, City Recorder
City of St. Paul
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