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Published on Friday, December 14, 2012

Legislative committee recommends restoring local government liquor revenue

Over the interim, we’ve been reporting on the Legislature’s Joint Select Committee on Junior Taxing Districts, Municipal Corporations, and Local Government Finance. The committee has been asked to look at local government efficiencies, the possibility of consolidation, local government funding, and the impacts of liquor privatization on local governments.

At its final meeting of the year, the committee passed its first recommendation to the Legislature: Restore the $10 million in liquor taxes to cities and counties that was taken last legislative session to help balance the state budget and restore the pre-initiative liquor profit sharing system. This is a welcome step for cities, who have been raising concerns about losing the additional funding for public safety that was approved by Initiative 1183 and the loss of growth from liquor revenues going forward.

The committee also discussed local government revenue tools, flexibility, and use. The committee decided it should further study criminal justice responsibilities and spending, including local public health, inmate medical costs, and the annexation of park districts and related taxes. Questions have come up about these issues, but the committee wants to gather more information before deciding whether to recommend changes.

The committee did not take action on the issue of local government consolidations. Many stakeholders have provided testimony over the last several months, but the question about what to do, if anything, remains.

The committee plans to meet again in early January with additional information on local revenue tools, their flexibility, and the specific questions outlined above. AWC will work with committee staff to prepare more information about state-shared revenues, revenue flexibility and limitations, and more information about existing revenue tools.