Minneapolis mayor’s proposed 2016 budget includes tax levy increase

MinnPost photo by Craig Lassig
Mayor Betsy Hodges: “If we do what we’ve always done, we will get what we have always gotten. And what we have always gotten is no longer suitable for a competitive, successful city in the 21st Century.”

A good salesperson usually starts with the benefits of the product before mentioning the price.

Minneapolis Mayor Betsy Hodges employed that strategy Wednesday while pitching her proposed $1.22 billion 2016 budget. The first-term mayor gave a good-news presentation, relating the way good economic times, frugal spending and conservative forecasting have provided the city with some money to spend.

Hodges asked the City Council to use it to add some people and some features to city government and to change the way city government operates.

“If we do what we’ve always done, we will get what we have always gotten,” she said near the beginning of her 40-minute speech. “And what we have always gotten is no longer suitable for a competitive, successful city in the 21st century.”

She said she framed her spending plan around three questions she keeps on her office whiteboard — How does this move the dial on equity; how does this move the dial on growth; and, how does this help the city run well?

“The longer I am mayor, the more it becomes clear that those three questions are essentially the same,” Hodges said. “We are growing the city only if we are growing it for everyone. We are running the city well only if we are running it well for everyone. That’s what this budget does — it assures the work of weaving equity into the fabric of our city is fundamental to how we do business.”

Only after sprinkling some new spending across city government — in public safety, in housing, in employment programs, in the arts, in social services, in infrastructure, in environmental services (and only after talking about belt-tightening that will leave some positions unfilled and find $750,000 in spending cuts) — did Hodges talk about taxes.

Some can expect to pay less

She called for an increase in the city’s property tax levy of 3.4 percent. That means that while the current levy is raising $287 million, Hodges wants council approval of a total levy amount of $297.5 million next year. Because of the complexity of the property tax system, however, an increase doesn’t mean every property owner will pay more. Hodges said that three-quarters of taxpayers in the city can expect to pay less.

But property taxes are controversial. Hodges’ request last year for a 2.4 percent increase was cut back to 2.1 percent on a 7-6 council vote, after a contentious debate over some cuts to equity and environmental programs.

Hodges tried to soften the impact by saying how the levy increase could have been even higher and that her 3.4 percent was something of a discount.

“This year, just to keep doing what we have been doing — only to maintain current services and account for inflation — would have required a 4.4 percent increase to the levy,” she said. “That would have meant collecting 4.4 percent more dollars overall from all classes of property; not just residential, but commercial and apartments as well.”

Hodges also tried to head off complaints that all of the new commercial and residential construction should be increasing property tax collections naturally.

“It is good that there are cranes across the sky as far as the eye can see, but it’s important to remember that that doesn’t automatically mean we collect more money in property taxes,” Hodges said. “It does mean that more properties are available to share in the overall amount that we levy, but we still have to set the amount of property taxes we need.”

‘Bringing in more; spending less’

The new spending proposed in the budget are a combination of adds to the on-going operating budget and one-time-only expenditures. The latter, Hodges said, are possible because many city funds have larger than needed balances, something she attributed to faster-than-forecast growth in non-property tax revenues and tight controls on spending.

“In other words, we are bringing in more and spending less and we have accumulated extra over time,” Hodges said.

Here are some of the spending additions Hodges proposed:

  • adding a staffer dedicated to meeting federal rules under the Americans With Disabilities Act;

  • adding two police officers focused on downtown, for a total of 862 sworn officers;

  • adding a new police recruit class to respond to ongoing high-retirement levels among current officers;

  • adding two forensic scientists in the crime lab;

  • adding two analysts in the crime analysis unit;

  • adding two positions to help deal with requests for data under the police body camera program (which is below what comparably sized cities have needed);

  • adding four new construction inspectors and six housing inspectors;

  • adding $2 million to the housing trust fund for a total of $8.5 million plus another $1 million for housing that won’t be placed in the trust fund, a decision that will give the city more flexibility in responding to housing needs, especially for larger families that need more space and to help seniors stay in their own homes. The total for affordable housing would be $13 million;

  • adding money to expand the EMT Pathways program, the TechHire initiative and the BUILD Leaders program — all designed to get lower-income and minority residents into jobs and training;

  • adding money for two staffers to begin preparing for the Working Families Agenda, which would implement city ordinances on fair scheduling, wage theft and sick leave;

  • money to study how a minimum wage increase could be implemented regionally, rather than by Minneapolis alone (which Hodges opposes);

  • $400,000 to help the Park Board for a pedestrian redesign around the Walker Art Center;

  • $10 million for the city’s share of a $40 million rebuild of the 10th Avenue Bridge;

  • $155,000 to continue planning to remake the Upper Harbor Terminal on the Mississippi River;

  • $400,000 to begin converting street lighting to LED technology;

  • $580,000 for public art, plus funding for two interns in the arts and culture program and money for the city’s 10-year arts plan;

  • $200,000 to increase polling capacity in time for the 2016 presidential election.

The council will begin work on the budget September 10 with a budget subcommittee briefing. After working on individual sections of the plan, Ways and Means Committee Chair John Quincy said the council will hold a public hearing Nov 18 and then two budget markup meetings Dec. 4 and Dec. 7, during which amendments will be considered.

The final public hearing and budget adoption is set for Dec. 9.

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Comments (2)

  1. Submitted by Pat McGee on 08/13/2015 - 09:48 am.

    Mayor’s budget

    Thank you for your summary. Here are some questions I and others would like to have answered. Can you take them on?
    Could you please find out what the “outright cuts” she is proposing are?
    When will a transcript of the speech and a copy of the proposed budget be made available online? (St.Paul’s is.)
    Has she ever seen a typical workplace in the City of Minneapolis to even pretend the work environment is conducive to productive work?
    Why doesn’t the Mayor’s office have an intranet site to communicate with the city employees she professes to value?
    Does she plan to reappoint the Chief of Police?

  2. Submitted by sheldon mains on 08/13/2015 - 01:22 pm.

    need to explain how property taxes are calculated

    did a poor job explaining property taxes. The number the city decides on is the total property taxes collected– not the property tax rate. The rate for all the property is determined by a formula for each type of property. The new construction would not bring in any new taxes unless the city increases the amount collected– the new construction just increases the base of the property values that pays the taxes.

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