Property taxes to rise under mayors proposed budget

However, Rybak will attempt to seal-coat the deal

In his budget address Aug. 14, Mayor R.T. Rybak reflected on five years of fiscal responsibility and his plans for the next generation of Minneapolis roads and bridges.

But those plans will come at a cost. Under Rybak’s proposed $1.5 billion budget, property taxes would rise 6.86 percent, equaling about a $65 increase in 2009 for a Minneapolis home valued $216,000.

Notably, the increase was the first time under the Rybak administration that property taxes have gone up less than 8 percent since a five-year fiscal plan was implemented in 2003, according to Rybak spokesman Jeremy Hanson.

Priorities

The mayor said first and foremost, he’s recommending a continued commitment to police and public safety.

Rybak proposed more than half — $210 million — from the General Fund to be spent to “maintain” the city’s police force and its 880 officers (an increase of about $6.5 million more than last year).

“Our No. 1 goal is to make Minneapolis a safe place to call home, and we’ve put our money where our mouth is,” Rybak said.

Extra police money in 2008 has arguably equaled a dip in violent crime (25 percent) and juvenile violent crime (46 percent) citywide.

If public safety is priority one, plugging potholes seems to be priority two.

“We are failing in our duty to reinforce and support the infrastructure passed to us by our predecessors and we are meaning to pass on to our children,” Rybak said. “No other part of our operations has suffered more than our basic city infrastructure.”

To remedy this, Rybak’s proposed an “Infrastructure Acceleration Program.” Over five years, $27.5 million will be used to fix major streets, bike trails, and traffic and streetlights in Minneapolis.

And for those who don’t like potholes, Rybak said an additional $19.5 million would be allotted to resurface 43 miles of major streets and seal-coat cracks and potholes on 26 miles of streets and bike trails over the next five years.

Rybak has earmarked money to fix and reopen the Bryant Avenue Pedestrian Bridge — the wobbly bridge is currently closed. The bridge is being studied and a damage report is expected by the end of November, according to Public Works Director Steve Kotke.

Rybak proposed using the Hilton — or Legacy — fund to foot the proposed $27.5 million needed to improved roads and bridges.

Rybak said that in 2002–2003, state-funding cuts meant a 10 percent reduction to the General Fund and many hard fiscal decisions that didn’t always please everyone, including taxpayers. But due to that diligence, Rybak said the city has cleared an $88 million debt and can focus efforts and money on pressing needs such as public safety and a major infrastructure overhaul.

A big setback, perennially, in the city’s budget has been in the area of police and fire pensions.

For the past four years, Rybak said, the city has been asking the Legislature for pension reform, but millions continue to be siphoned from basic core services, Rybak said.

After the bridge collapse, overtime paid to just three police officers increased police pension costs to all retirees by nearly $1 million.

“That is ridiculous, and that is something we must have
the Legislature help us fix,” Rybak said.

Council Member Betsy Hodges (13th Ward) said she is now in her second year of tackling the issue as chair of the Council’s Intergovernmental Relations Committee.

“This is a very large, ongoing issue, and we will continue to hold talks with legislators in the [2009] session,” Hodges said following Rybak’s address.  

In 2008, pension fund obligations are $22 million, more money than the proposed property tax increase, Rybak said.

What’s next?

Rybak will present a supplemental budget in September after federal home foreclosure legislation is complete, Hanson said. A new law could mean more money for city housing.

The proposed budget will move through a number of Council committees in the coming months and will be voted on by the full Council in December, Hanson said.

Money for NRP

While the current form of the Neighborhood Revitalization Program (NRP) is nearing its end, neighborhoods still can expect to have about $80 million over 10 years to be devoted to them. That is, if not much changes from Mayor R.T. Rybak’s 2009 recommended budget.

Rybak unveiled his proposal for the future of NRP on Aug. 12.

Because of action taken this year by the state Legislature, tax districts that fund the current form of NRP have been tweaked, and millions in state and county taxes no longer will subsidize the program after 2009. However, the Legislature did OK the use of money collected annually from new tax districts to fund neighborhoods, along with paying down Target Center debt.

Those new tax districts would not begin generating money until 2011, though. To fill the two-year gap, Rybak is proposing spending $500,000 a year from the city’s general fund in 2009 and 2010.

Rybak’s proposal also includes the creation of a new neighborhood fund — with dedicated funds to neighborhood organizations that would be divvied up similarly to the current NRP system — and a community innovation fund, which would involve a competitive bidding process.

As for how the new neighborhood program would be structured, Rybak’s proposal doesn’t deviate much from the recommendations of the NRP Work Group. It would set up a Department of Neighborhood and Community Relations, which would oversee the program; directly assist and guide neighborhood groups; and coordinate a Neighborhood and Community Advisory Board.