Proposed budget: Departments, neighborhoods take financial hits

Financial stress is apparent in Mayor R.T. Rybak’s proposed 2010 city budget, unveiled Aug. 13.

Prepared in the wake of a recession, tens of millions of dollars lost in state aid and expectations of steep increases in pension fund payments, the budget proposes a 6.6 percent property tax increase while making cuts to every city department and previously suggested neighborhood funding. But it also finds room for stability, keeping money for street repairs at current levels and increasing to $4.3 million the city’s investment in its Great Streets local business program.

Almost $100 million lighter than the 2009 revised budget approved in February, the 2010 budget would keep its focus on creating jobs. Rybak wants to double to $1.2 million what the city spends on its two workforce centers, which he said helped 60,000 people in 2008 brush up on their résumés and job skills.

Those centers are paid for mostly through grants and one-time payments; they don’t affect the general fund, which covers basic services. That fund is expected to see a $3 million drop in revenue from the 2009 amended budget, down to $371 million. Every city department would take a hit, although police and fire would see the smallest decreases.

A breakdown of general fund spending shows the Police Department’s share in 2010 would increase to 37.7 percent and the Fire Department’s to 15.8 percent, up from 34 percent and 14 percent in 2009, respectively.

Helping to lower costs would be many relatively small actions, including decreasing the Police Department’s fleet of cars by 15 (that would save about $370,000, Rybak said), consolidating cell phone plans (saves $201,000), reducing staff training in the Human Resources Department (saves $17,000) and eliminating a Health Department newsletter (saves $2,000).

The city also would eliminate 226 jobs. It’s unclear exactly how many of those would result in layoffs — when in February the city got rid of 63 positions, just four people were laid off. Rybak also proposed developing a voluntary leave program, an idea he said stemmed from city employees’ own suggestions.

Notably different from last year, Rybak was less buoyant when discussing funding for neighborhood revitalization. In 2008, he presented a plan to spend about $8 million a year over the next 10 years to continue efforts similar to the near-its-end Neighborhood Revitalization Program.

“The world has changed [since then],” he said Aug. 13. “We can simply no longer afford to do that.”

His proposal would limit the 2010 allocation for neighborhood purposes to $6.5 million.

Meanwhile, Rybak’s proposed property tax increase for 2010 is 11.3 percent, which translates to an about 6.6 percent increase for the average Minneapolis home. That’s a little less than what Rybak proposed last fall, when he suggested a 6.86 increase. For 2010, a large chunk of collected taxes would go toward pension fund payments, which are projected to increase at dramatic levels every year starting in 2010.

Rybak is in the midst of a second reelection bid, but he also is widely expected to enter the 2010 governor’s race. Before finishing his budget presentation, he made sure to take a few shots at the way the state has handled its finances. Responding to Gov. Tim Pawlenty’s repeated criticisms of Minneapolis’ spending decisions, Rybak said the city doesn’t need a lecture from someone who has “pushed the state into fiscal chaos.”

“We will continue to lead the way within the city of Minneapolis,” Rybak said.

The budget next moves to the City Council’s budget committee, which will begin hearings in September. Public comment will be taken on Nov. 18, and council members will propose and make changes to the budget on Dec. 2 and 3.

The council is scheduled to adopt the budget on Dec. 7.


Breaking down Rybak’s budget

Increased

Great Streets:
The city’s local business-supporting program would expand with a $4.3 million allocation.

Employment help:
The city’s two workforce centers, which helped about 60,000 people in 2008 with résumés and job skills, would get $1.2 million — more than double its current $511,000.

Police and fire’s share of the pot:
The city’s police and fire departments would get larger chunks of the general fund, up by 3.7 percent and 1.8 percent, respectively. However, the general fund also would be $3 million smaller.

Property taxes: The average Minneapolis home would see a 6.6 percent property tax increase.

Decreased

State aid:
Because of unallotments from Gov. Tim Pawlenty, Minneapolis is set to receive $21.3 million less in local-government aid than it had expected for 2010.

Total budget:
The city’s budget is expected to be $1.31 billion, about $100 million less than the 2009 revised budget.

General fund: The general fund, which pays for basic services, would drop to $371 million, down $3 million from 2009.

Departments’ revenue:
Every city department would take a financial hit, including police and fire — although they would see the smallest decreases.

Neighborhood funding: Mayor R.T. Rybak has revised his $80 million over 10 years plan for funding neighborhoods, proposing to spend no more than $6.5 million on neighborhoods in 2010.

Number of jobs:
The budget would eliminate 226 jobs. The number of layoffs that would occur is currently unknown.


Unchanged


Infrastructure:
Last year, the city approved Rybak’s Infrastructure Acceleration Program, which annually puts $5.5 million toward eliminating the city’s backlog of infrastructure needs. That amount wouldn’t change under the mayor’s 2010 proposed budget.