1. Local Sales Distribution History 1959 – Local Option Sales Tax Authorized (.5%) – 100% Point of Sale 1975 – Increase to.75% 1981 – Distribution Formula passed – Vetoed constitutional/political issues 1982 –State Constitution Amended – Authorizes “horizontal revenue sharing”

2. Local Option Sales Tax History 1983 - 50/50 passed –.25 % increase (1%) – Hold Harmless Provision – 5 yr. Phase In – For various reasons not completed until 1999. 2006 – phase out of “hold harmless” begins – Ends 2012/13 or 2015/16

3. Reason for Distribution Formula The goal of the 1983 distribution formula (50/50) was to achieve a rough balance between interests of retail centers and bedroom communities. It was and is a significant compromise between various interests that has effectively worked for nearly 30 years.