By Rep. Dan Dorman

This past week at the legislature, the House Tax Committee listened to a report from the Minnesota Department of Revenue about local sales and use taxes in Minnesota. This is a subject close to us in Albert Lea, where local officials have been working to implement a citizen-approved local sales tax for lake cleanup. The need has been highlighted by the recent fishkill in Albert Lea Lake due to a lack of oxygen in the water.

Not surprisingly, the Revenue report essentially recommended not changing a thing. In 1971, the Legislature enacted a statewide prohibition on local sales and uses taxes. Today, if a community wants to adopt a local sales tax, it must first get the approval of the city council, then legislative approval, and then the approval of voters through a referendum. It’s a cumbersome process.

One rationale for the 1971 action (The “Minnesota Miracle,” when state sales taxes were increased to 4 percent &045; they’re 6.5 percent now) was as effort to reduce local property taxes with state aids and to even out the uneven distribution of revenues across communities. The report states a fear, “… that significant expansion of the local sales tax as a revenue mechanism could lead either to the problem of ‘winners and losers’ or to increased pressure on the state legislature to expand funding for local government aid.”

But as we can see by the recent flare-up over Local Government Aid cuts to Greater Minnesota cities, state revenue continues to be unevenly distributed among Minnesota communities despite our best intentions. There continues to be winners and losers.

As of the 2000 fiscal year, the local property tax in Minnesota accounted for 94.2 percent of all local tax revenues. Today, a local sales tax exists in only 10 of Minnesota’s 853 cities and only in one of our 87 counties (Cook County). That hasn’t stopped many cities (Albert Lea included) from trying. I will again introduce a bill to authorize the Albert Lea sales tax.

But there has to be a better way. There continues to be a perception throughout the state that legislative sales tax authorization is driven by politics, not merit. I agree. Last week, I introduced my “shall issue” bill for local option sales taxes. It would get the Legislature (and politics) out of the sales tax approval process and delegate that authority to the Commissioner of Revenue on a case-by-case basis. While I don’t think it would lead to a sudden jump in local sales tax approvals, I think it would lend a bit of credibility to a process that has been tainted by politics.

Got a question or concern? Write me at 579 State Office Building, 100 Martin Luther King Jr. Blvd., St. Paul, MN 55155, or call me, toll-free, at 1-877-377-9441. My e-mail address is rep.dan.dorman@house.mn.

(Rep. Dan Dorman (R-Albert Lea) represents District 27A.)