Regional News

Dansel bill would give local governments more flexibility in use of tax revenue

Feb 18, 2015

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A measure sponsored by Sen. Brian Danselthat would provide cities and counties with more flexibility when spending revenue from real estate excise taxes received a public hearing Tuesday before the Senate Government Operations and Security Committee.

“Local governments are struggling to provide services and take care of roads, sidewalks and streetlights, as shared funds for those activities are dwindling,” Dansel said. “But taxes don’t have to be raised in order to maintain projects that have already been built.

“These local governments aren’t so much asking for new funds, but flexibility in how they can use their existing dollars to help with maintenance.”

County legislative authorities may impose a real estate excise tax (REET) on each sale of real property in unincorporated areas. Similarly, city and town legislative authorities also may impose a REET within their corporate limits. Revenues generated from REET must be used for financing qualifying capital projects and for housing-relocation assistance.

Counties and cities that have opted into the state Growth Management Act may also impose an additional excise tax, known as REET II.

The committee considered an updated version of Senate Bill 5585, which would allow local governments that impose an excise tax to under REET I to use up to $1 million annually for maintenance of capital projects, if there are adequate funds available after REET I funds have been used for planning, acquisition, construction or other improvements to capital projects.

“Having this flexibility would mean that in many cases cities and counties would not be forced to raise taxes to meet critical maintenance needs,” said Dansel, GOP-Republic, who serves on the government-operations committee. “The counties have told us that it doesn’t make sense for them to have funds sitting in an account for new infrastructure, when they have infrastructure currently that they can’t maintain. This bill fixes that problem.”

Dansel said the bill language is still a work in progress. “I’m looking forward to continuing my work with cities, counties, the real estate community and others to make sure that this bill works for all stakeholders,” said Dansel.

SB 5585 has until Friday to clear the committee and remain eligible for passage this legislative session.