Shared Services Get Punished
By Andrew Richter
Our good friend Jeff Kolb wrote an excellent article recently in the Sun Post about the bizarre tax exempt bill that doesn’t include shared services.
During the most recent legislative session, the Minnesota legislature passed a law that would make most purchases made by cities and counties exempt from sales tax. This change should have a positive and measurable impact on the budgets of cities like New Hope and Crystal.
However, the new law has at least one major flaw: purchases made to support shared services under what is called a joint powers agreement are not tax-exempt. For Crystal and New Hope, this means that any purchases made by the West Metro Fire Department will be charged sales tax.
This can add up to thousands of dollars on major equipment purchases. West Metro is one of the largest line items in the budget of Crystal and New Hope. We entered into a shared services agreement to save money for our taxpayers, but we are now being penalized for this by the DFL legislature.
Sen. Ann Rest from New Hope is the Chair of the Tax Reform committee, and Vice Chair of the Taxes committee. After almost 30 years representing New Hope she should be aware of the financial impact West Metro has on the city’s budget. However, she and her colleagues left New Hope, Crystal, and countless other local governments around the state behind when they passed a law that penalizes local governments for acting responsibly.
Fiscal responsibility should be rewarded, not penalized. Rest should know better, and she should do better.
Here here Jeff!! I’m sure Senator Rest just can’t wait to try and take credit for this! Isn’t it interesting how the DFL raises taxes on citizens but get rid of taxes for government?