Rybak’s budget doesn’t raise property taxes

Minneapolis recovers from recession with the proposed budget.

Minneapolis Mayor R.T. Rybak said Monday the city’s property taxes are too high. HeâÄôs proposing a budget that would not increase the city’s property tax levy next year.

Over the past decade, Minneapolis has trimmed spending 8 percent, cut the number of city workers by 10 percent and paid off a lot of debt, Rybak said. Even so, he and the Minneapolis City Council have heard a chorus of complaints from city residents that property taxes are too high.

Rybak’s proposal for no increase in the city’s portion of the property tax for residents is a change from just a month ago, when he said heâÄôd ask for a 2 percent levy increase.

Part of the savings come from laying off as many as six city firefighters and permanently cutting funds for a batch of vacant city positions that might have been filled.

Details of the staffing and service reductions won’t be known until December when the City Council votes on the final budget.

At the same time, Rybak proposed a $150 million city street paving effort over the next five years to deal with rash of potholes caused by weather and deferred maintenance.

“That is an increase of $57 million over five years,” Rybak said. He added that the city will borrow the money to pay for the road work âÄî money that can’t be used to stem any city staff losses due to budget cutting.

Rybak said the borrowing is possible in part because the city has paid off hundreds of millions of dollars in debt.

Over the past 10 years, the city paid off $183 million in debt, including $114 million in internal-service debt and deficits. Rybak said $69 million in pension bonds have been paid off as well, freeing up capacity to fund police, fire, public works, public health and other critical services.

The city also paid down $296 million in general obligation bonds.

âÄúItâÄôs a little like paying off your mortgage so you can take out a home improvement loan to fix the kitchen,âÄù Rybak said.

Rybak said the city has to maintain infrastructure to keep its economy growing, citing how Minneapolis is recovering from the recession faster than the country.

He said the city consistently gets high marks and top ranks on a range of livability factors. An exception is the jobs picture for African Americans compared to white residents.

âÄúOurs is one of âÄî if not the highest âÄî in the gap between white and black unemployment,âÄù he said. âÄúThat must end; we must take more action.”

Rybak proposed using $300,000 to address the problem.

Rybak’s 0 percent property tax increase proposal for next year’s budget is seconded by another taxing authority âÄî the city’s independent park and recreation board.

Even so, itâÄôs likely that most Minneapolis property owners will pay higher property taxes.

The main reason is that state lawmakers changed a formula for calculating property tax relief, according to Betsy Hodges, who chairs the Minneapolis City Council’s Ways and Means Committee.

There are also property tax decisions still to be made by Hennepin County and the Minneapolis school district.

“Even if every single one of those entities proposed a 0 percent increase, residents of Minneapolis will experience an increase on their bill due to the stateâÄôs elimination of the market valuation homestead credit,âÄù Hodges said.

RybakâÄôs proposed budget now goes before the committee Hodges chairs, and a final budget will be voted on by the council sometime in December.

 

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