Mayor’s budget features smaller cop drop

The good news is that Mayor R.T. Rybak said he found a way to avoid police layoffs next year, despite continuing budget woes.

The bad news is, Rybak's proposed 2005 budget allocates $350,000 for police early-retirement incentives. That means there would be fewer cops than the current 796, but no one will be forced out the door.

Rybak delivered an hour-long budget address Aug. 12. The Council will debate the budget and vote in December.

How many fewer cops there are depends on how many officers retire. The city needs at least nine early retirements in 2005 to balance the budget under Rybak's plan.

More tax hikes

Minneapolis continues to fight an uphill battle to maintain basic services despite an 8 percent overall property tax hike, Rybak said.

Homeowners will pay. The owner of a median-valued $211,000 home would pay $100 more for city, parks and library services, up 12.8 percent from 2004, to $881. (That does not count Hennepin County and Minneapolis School District tax increases.)

The owner of a $475,000 home would pay $272 more, to $2,672, up 11.3 percent from 2004.

Residential utility bills -- sewer, water, solid waste and recycling -- would increase $27 a year, to $733, a 3.8 percent increase.

About two-thirds of the new property tax revenues would pay off debt, the mayor said.

Total city property taxes would rise $14.3 million, Rybak said. Of that, $5.1 million would pay for current city, parks and library services, while $9.1 million would pay for self-insurance and other "internal service" shortfalls ($3.9 million), the library referendum ($3 million) and old city pension debts ($2.2 million).

The Affordable Housing Trust Fund took a $1 million cut in Rybak's proposal, to $8.9 million.

Higher spending on transportation maintenance again will lag behind inflation.

Pain explained

The mayor explained in detail the city's financial problems.

The state and federal government had cut $38 million in city aid since 2001, he said. If the city had that money today, it could reduce 2005 city, parks and library property taxes by 20 percent.

State tax policy changes have shifted the property tax burden to homeowners.

In 1997, for instance, homeowners paid 32 percent of municipal property taxes, commercial/industrial businesses 56 percent, the mayor said. By 2005, it had flipped: homeowners will pay 53 percent, commercial/industrial 35 percent.

The mayor warned of rising pension debts. Several pension fund are short what they need to pay retirees -- and the city is ultimately responsible.

Rybak said that in 2005, the city would pay about $15 million to pay off pension debt -- but that amount will be $38 million per year by 2010 -- equivalent to recent state aid cuts.

"It is impossible to say that you believe in basic services in Minneapolis and not believe in pension reform," the mayor said.

The mayor has appointed a committee to recommend solutions, which are due in early September.

New stuff

Rybak salted the speech with a few -- small -- new initiatives, including a $200,000 planning study for streetcars on the Midtown Greenway, and one-call service for graffiti and street-light outages, to begin in November.