State deal may mean more cops, teachers for Minneapolis

$16 million more from the state will boost public safety, parks and libraries

Mayor R.T. Rybak will release his 2006 budget proposal Thursday, July 28 - and it will include hiring 60 new police officers and a $900,000 increase in fire protection and criminal prosecution, thanks in large part to an increase in state aid.

"My goal is to hire as many officers as we can right now," Rybak said.

City staff estimate that instead of an expected $1.7 million state-aid cut in 2006, the city, parks and libraries would get a $16.3 million increase. Rybak said he would direct every new state dollar to public safety, "my top priority."

The Legislature passed the budget deal July 13.

City government gets approximately 80 percent of Minneapolis LGA; the Park Board gets 12 percent and the Minneapolis Library Board gets 8 percent. More than half of the 2006 LGA increase is one-time money; a $7.8 million increase should continue into future years.

The city needs to use $2.5 million of its increase to pay cost-of-living increases, such as raises and health insurance hikes, for current police officers, a mayoral aide said. The city can hire some of the 60 new officers because of earlier decisions to use one-time surpluses to pay off debt.

(In related news, the Minneapolis public schools appear to have $3 million more to spend than it had anticipated - plus $1 million in new, optional taxing authority. At $80,000 a year for a teacher's salary and benefits, a $3 million hike would pay for 37.5 teachers citywide.)

The mayor's budget address will set the stage for the fall election. Police and fire staffing is already a hot campaign topic.

The Police and Fire departments have had significant cuts since the late 1990s. Rybak's chief challenger, Hennepin County Commissioner Peter McLaughlin, has criticized the mayor and said he would do better. Rybak has blamed the state cuts and a drop in federal "Clinton Cop" support.

Rybak and the current Council have faced several budget crises during their terms in office, including LGA cuts. The city expected to get $117.6 million in LGA in 2003, but by 2005, it had $37.3 million less, or a 32 percent cut.

Minneapolis State Rep. Margaret Anderson Kelliher, a minority whip who pushed for more LGA, said: "This will allow the city to regain some of the loss from the previous tax bill and be able to invest in public safety and make other strategic financial decisions to stabilize the city's finances."

The mayor has also said he would add other funds to the Planning Department to bolster planning for Uptown, downtown and transportation.

That news comes in the wake of a contentious debate over an Uptown mixed-use development, which passed the City Council 9-4 July 1. A proposed 148-foot residential tower at 1320 Lagoon Ave. got trimmed to 112 feet, but was still too tall for some residents.

Some Councilmembers argued the development was driving city planning, instead of having city plans influence development. Rybak counts himself among those who thought the condo building should have been shorter.

"Minneapolis is very different than it was 20 years ago, where we had to create financial incentives to draw business to town," Rybak said. "Now we need to create inspirational visions that encourage private individuals to make private investments. That only works if we are creating that visionary plan ahead of the development curve."

That means increasing planning capacity, Rybak said. He has not firmed up budget numbers on the increase.

The time and place of the budget address are not set.

School spending

Marj Rolland, Minneapolis schools' chief financial officer, said she has not seen city-specific numbers, but based on statewide figures, she estimated the schools would see a $4 million uptick.

That is offset by a $1 million cut, she said. The state did not fund the district's High Five program, a kindergarten program for 4-year-olds. The net increase is $3 million.

Rolland said she would recommend the Board set aside $1 million to build its reserve. "We have been criticized by our auditors and the bond raters that we need to build back that reserve," she said.

Jim Grathwol, the school district's lobbyist, said in general, the legislation continued the trend of shifting school funding away from the state and back onto the property tax levy.

For instance, the new legislation gives Minneapolis the authority to add a discretionary levy of up to $25 per pupil, which would raise approximately $1 million, he said.

The legislation also increases the referendum cap, allowing any district to ask voters for more money, if and when it goes to referendum.

The plan also makes the city's "transition levy" permanent. In 2003, the state cut support for such things as Limited English Proficiency education, summer school and aid for underachieving low-income children. The transition levy allowed the district to tax to recover some of the lost money.

The transition levy was going to expire in 2009, Grathwol said. The school district would have needed a referendum to continue it. The 2005 bill makes the transition levy permanent, and eliminated the referendum requirement.

State. Rep. Jim Davnie, DFL-Minneapolis, who is a teacher, said the good news is there is more education funding than initially anticipated.

"The bad news is a big chunk of that is reverting back to your property taxes," he said.

How big a property tax hit?

Davnie said the numbers were not available yet.

Grathwol said the education bill also amends the Teacher Tenure Act. It will allow Minneapolis schools to negotiate layoff and retention on a basis other than seniority.

The district would have to negotiate those changes as part of the teachers' contract, he said. The bill would go into effect Aug. 1.