Mayor plans funding cuts, tax increases

Shira Kantor

In her 2002 budget framework address Thursday, Mayor Sharon Sayles Belton proposed large cuts to the Minneapolis Community Development Agency – both in funding and its capacity – as well as cutting the Neighborhood Revitalization Program’s funds in half. She also suggested two tax levies to help balance gaps in some of the city’s finances.

Because the recent state property tax bill eliminated tax increment financing dollars, which funded both NRP and portions of MCDA, Sayles Belton recommended funding NRP with $10 million annually and dropping MCDA funding to $7 million.

In addition, the agency itself would have to cut 40 to 50 percent in capacity, and Sayles Belton said MCDA should tighten its focus to address four main objectives: affordable housing, pollution cleanup, strengthening the city’s commercial corridors and revitalizing small business ventures.

Despite the proposed cuts, Sayles Belton underscored her commitment to developing the city.

“The NRP will not die under my watch,” she said.

Colleen Moriarty, the mayor’s chief of staff, said the city had no choice. “Because of the action of the Legistlature, we wouldn’t have an NRP program at all next year.”

The mayor proposed a 6 percent Housing Redevelopment Authority levy to aid both programs’ financing, a resource Moriarty said has not been tapped in 20 years.

The levy will provide $6 million of the $17 million NRP and MCDA would receive, the rest would come from other funding sources, Moriarty said.

MCDA Executive Director Steve Cramer said the cuts were not unexpected, given the outcome of the legislative session.

“It would have been nice if we didn’t have to confront this, but we do,” he said. “I can’t expect that a 27 million dollar loss of revenue is going to be overcome without some fairly dramatic changes.”

The NRP administration declined to comment, adding that they needed to study the issue further.

Sayles Belton proposed another 8 percent tax levy to make up for a $17 million hole in the city’s services departments. The levy – down from 8.4 percent in 2001 – would cover $10.6 million of the city’s operating costs, the rest of which Sayles Belton asked individual city departments to cover.

Sayles Belton’s framework also called for the integration of the administrative staff of MCDA, NRP and the city’s planning department. She said she did not want to combine the groups but have them work cooperatively to better reach city goals.

She also recommended restructuring the MCDA Board of Commissioners which is now comprised of the City Council. Sayles Belton said Minneapolis citizens should head the agency.

Council Member and mayoral candidate Lisa McDonald later condemned Sayles Belton for raising taxes, saying the city’s financial shortcomings “come on the heels of the mayor’s pet projects – the $62 million Target store subsidy and the $39 million Block E project.”

Internet strategist and mayoral candidate R.T. Rybak criticized the mayor, saying, “she provided none of the significant reform of the bureaucracy that she should have.”

Hennepin County Commissioner Mark Stenglein said he was appalled to see Sayles Belton propose tax increases.

“The state Legislature has gone through an epic effort in reforming property taxes and the first thing the mayor does is raise them,” he said.

The City Council and the Board of Estimate and Taxation will have to approve the proposed levy limits in December.