Last week, St. Paul Mayor Chris Coleman proposed an increase in the city’s property tax levy and blamed it on the Legislature’s latest round of Local Government Aid cuts.
Coleman also proposed fee increases, or what he called “non-property tax revenue.” For many homeowners in St. Paul, the fee increases will be the larger burden — as much as $79 in fee increases for the year. This is a St. Paul story for the moment, but it won’t be for long.
In July, just before the latest Local Government Aid cuts were decided by the Legislature, we asked Minneapolis Board of Estimate and Taxation President David Wheeler for comment on what will most certainly be another round of property tax hikes for Minneapolis. “The bottom line,” Wheeler said, “is we need the economy to improve.” Failing that, he says, “We need to ask taxpayers, ‘What is it you can live without? What would you cut?'”
That’s the question I’m putting to you today: Your city, wherever you are in Minnesota, is no doubt struggling. Will you accept property tax increases? Would you accept fee increases? And what is it you can live without in your city? What would you cut?
And what revenue-generating ideas not now in place do you support? The League of Minnesota Cities has, in the past, proposed tying local services directly to the beneficiaries — upkeep of a local street outside of a McDonald’s, for example, could be financed in part by a special fee paid by the restaurant. Or what about special fees for tax-exempt church or government properties?
I want to hear your ideas and objections in the comments. I’ll add bits and pieces of what you have to say into this post. Too often we have this discussion when it is too late — after property tax notices have already gone out. Let’s begin the conversation now.
Your voices (updated 8/23/11 at 8:45 AM)
Click on a person’s name to see their full comment
“I have lived in my house in Saint Paul for 5 years. In that time my taxes have more than doubled and the value of my has has declined by more than a third. Why can’t Minneapolis and Saint Paul charge a use tax for everyone who works in the cities and doesn’t live here? I believe I pay enough taxes, there has to be another way. I can’t make up for what Tea Party supporters don’t want to pay and what the state is taking away.” —Pat Black
“We have no choice but to accept increases. Home values have fallen. It’s not as if people can, in protest, sell their homes and move on. We’re all trapped.” —CJ McCormick
“Really great to get this conversation going now — cities must have their proposed levies into the state in early September and 2012 budget discussions are happening now. As a local elected official, it will be interesting to see responses!” —Patrick Backen
“In Minneapolis I would cut the size of the City Council and make them take the furloughs they want staff to take. I would cut the fluff — bike paths, the sustainability program and coordinator, any arts positions and projects, the Department of Health, Neighborhood & Community Relations Department, Civil Rights Department, as well as the excessive number of managers in many departments. You can have a conversation about what to bring back if and when the economy recovers.” —Pat McGee
“In general, must say I am fine with the property tax increases as I know its mostly necessary until our economy picks back up … I think a commuter tax like in Pittsburgh would be interesting to try. Minnesotans continue moving further away from Minneapolis but many still count on the city for their jobs and entertainment … we need those who moved away to pay their fair share. The world has gotten much smaller in recent years but we keep on living as if nothing has changed.” —Adam Segar
“Adam says, ‘Now we need those who moved away to pay their fair share.’ We already have that. It’s called local government aid (or LGA). Because Minneapolis and St. Paul are the economic engines of the state, they pump tons of money to the state in the form of sales and income taxes. Also, as you correctly point out, both cities are heavily used by people who don’t pay property taxes or fees back to the city. That’s exactly why LGA was created. LGA was a promise: Minneapolis and St. Paul would continue to pump income and sales taxes into the State’s coffers, and in exchange the State would give a small fraction back in the form of LGA. The system worked great until Pawlenty broke that promise. The republican legislature continued to renege on that promise, drastically cutting LGA to the first class cities.” —Reggie McGurt
“A commuter tax sounds interesting and maybe promising. How is a commuter tax implemented? Parking tax? It would seem reasonable to levy a tax on parking in Minneapolis and St. Paul during work hours/days. All parking from 8 am to 5 or 6 pm, including parking garages/contract parking, could both increase revenue and decrease traffic during rush hour without impeding tourism-based revenue for shops and entertainment on evenings and weekends. It would also capture some additional revenue from sports fans coming to see a daytime Twins game.” —Rachel Kahler
“I propose that for every dollar of reduced LGA, Minneapolis withhold a dollar of taxes payable to the state and use that revenue to plug the LGA hole. No, it’s not legal. But what if city leaders had the courage to threaten to do that? We could have an actual conversation about how LGA works, why we have it and the costs of eliminating it.” —David Greene
“One idea worth exploring, especially as urban-hating Republicans dominate the political landscape for the time being, is the “commuter tax” mentioned by Pat and Rachel. This is an idea that’s been in place in St. Louis (and probably many other cities) for many years, where it’s called a ‘city earnings tax.’ If you work in the city, your employer deducts from your pay check a small percentage (I’ve no idea what the actual numbers are now. I haven’t lived there in 15 years) which is used by the city as they suggest — to compensate and pay for infrastructure that’s used by people who work in the city, but whose homes are in the suburbs … I’d be surprised if this gets off the ground any time soon, but it would be an effective way to at least in part address the current disparity between what the Twin Cities put into the state’s economy and what they get back from the state in return.” —Ray Schoch
“The answer isn’t to cut salaries or pensions or essential public services … [instead, cities and counties] should not forward to the state all the property taxes collected, but should withhold the amounts needed to replace LGA as it would be without the Pawlenty cuts and the current ones. Is is our money, after all.” —Bernice Vetsch