SENATE BILL REPORT

SB 5433

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background: A county legislative authority has the ability to authorize, fix, and impose a sales and use tax. The money from these taxes can be used for a variety of purposes, including the funding of chemical dependency and mental health treatment services and public safety.

Monies collected under the sales and use tax for chemical dependency or mental health treatment services must be used to provide new or expanded chemical dependency, mental health treatment, or expanded therapeutic court programs and services. The rate of tax must equal one-tenth of one percent of the selling price in the case of a sales tax, or value of the article used in the case of a use tax.

The rate of tax for public safety may not exceed three-tenths of one percent of the selling price in the case of a sales tax, or value of the article used in the case of a use tax. One-third of all money received with this tax must be used solely for criminal justice purposes.

With very limited exceptions, monies collected under the sales and use tax for chemical dependency and public safety must not be used to supplant existing funding.

Regular property taxes in excess of the 1 percent growth rate limitations on revenue may be levied by a taxing district if approved by district voters. This approval is referred to as a levy lid lift. A levy lid lift can last up to a maximum of six consecutive years. Monies raised under a levy lid lift must not supplant the actual operating expenditures for the calendar year in which the ballot measure is approved by voters.

Summary of Bill: The requirement that a program be new or part of an expansion of services to receive funding from the sales and use tax for chemical dependency is removed.

The requirement that funds collected under the public safety sales and use tax, the chemical dependency sales and use tax, and a levy lid lift not supplant existing funds is removed.

The act applies retroactively to October 1, 2008.

Staff Summary of Public Testimony: PRO: Amendments are coming that will address the concerns expressed by those against the bill. Section one of the bill will be removed. Receipts in terms of the revenue act are down 10.1 percent from one year ago. Revenue has declined in the last 12 of 13 months. Local governments cannot meet existing costs for services so local governments need the supplanting language removed so we can fund existing needs.

CON: Newer dependency and mental health treatment programs take time to get off the ground and to prove that they work. Existing statutory protections are necessary. The wording of the provisions that programs need to be new or expanding to receive funding was intentional. If this bill passes, the protections will be removed. There is another senate bill out there that handles this situation in a better way. Please support Senator Hargrove's bill.