Hodges proposes 3.4 percent increase in property tax levy for 2016

Mayor Betsy Hodges has called for a 3.4 percent tax levy increase for her proposed 2016 city budget — a $1.22 billion spending plan. 

The city’s revenues come from a variety of sources with property taxes accounting for about 20 percent.

Despite the proposed levy increase, the mayor said that roughly two-thirds of the city’s residential taxpayers would see a decrease in the city portion of their property tax bills during her 45-minute budget address at City Hall on Wednesday.

Like her first budget address a year ago, Hodges said an increase in the levy is necessary to account for inflation.

“Being a 21st century city means we transform our work to meet the needs of the people and economy of the new century,” she said. “So today I present for your consideration a budget based on that premise; a budget that invests in doing basic city work in new ways to reflect new realities. … This proposed budget, then, is focused on running the city well. It is a down payment on future success.”

The City Council adopted a 2.11 percent increase in the property tax levy for the 2015 budget — a reduction of the 2.4 percent increase initially proposed by Hodges. The final budget was approved after considerable debate about spending priorities for the city.

City Council Member Linea Palmisano (Ward 13) had pushed to reduce the levy increase to 2 percent for the 2015 budget in an effort to ease the burden for households experiencing steep increases in tax bills. As for this year’s proposed budget, Palmisano said the mayor’s “approach was right on.”

She’s pleased to hear that two-thirds of residential property taxpayers will see lower tax bills. Given that the 13th Ward has some of the city’s highest valued homes, she said she remains committed to helping seniors with fixed incomes who bought their homes 20 to 30 years ago remain in their houses. 

Hodges’ budget plan includes funding for two new police officers focused on downtown Minneapolis, allowing for 862 sworn police officers.

“While I do believe, along with Council Member [Blong] Yang, that the number of officers in the City needs to be larger than the 862 authorized sworn officers I propose in this budget, I also know that we are working hard to fill the 860 sworn positions we have right now in the wake of a wave of retirements that has not slowed down,” Hodges said. “We will continue to focus on hiring and maintaining staffing at 862 officers as we prepare for the possibility of adding more sworn officers over time.”

For the 2015 budget, spending on the police and fire departments accounted for about 17 percent of the city’s budget. The Public Works department was the biggest slice of the budget pie at 25 percent.

The mayor also pledged $10 million for the 10th Avenue Bridge, which spans the river south of the I-35W bridge. The bridge is in need of $40 million in repairs and the city has sought state bonding for the rehab.

Hodges has also proposed spending $13 million on affordable housing, including $1 million in flexible dollars for affordable housing options for families with three-bedroom units and larger and targeted rental assistance for families leaving homeless shelters.

She also addressed the Minneapolis Working Families Agenda, which she has been working on with Council and community leaders to address concerns about wage theft and the need for earned sick time and fair scheduling among low-wage workers. 

Her budget includes funding for a study to examine the impact of a regional minimum wage increase and two new positions to help with the roll out of new workplace policies. 

“While I have long said I don’t believe Minneapolis should go it alone on a minimum wage increase, the question of what it would look like for us to do it regionally is timely and important,” she said.

City Council Member Lisa Bender (Ward 10), who has been heavily involved in the working families policy discussions and affordable housing issues, commended the mayor for her budget plan.

“[It’s] really in line with my priorities,” Bender said. “I think it’s a really forward-looking budget that is really working to meet the needs of the city over the decade — to make sure that we’re prepared for the changes in our economy, that we’re meeting our housing needs head on. I really appreciate the mayor’s continued focus on equity.”

In a statement released after the mayor’s address, Minneapolis Works, a coalition of low-wage worker advocacy groups, said the mayor’s budget appears headed in the right direction.  

“We know that the gaps in racial and economic equity are wider in Minneapolis than they are in any major American city and we know that it is far past time to take aggressive action on these issues,” the group said. “We are hopeful the Mayor and City Council will address these critical workforce issues this year. We need to act with urgency. The cost of any further delay in improving work and wage standards for hourly workers in Minneapolis is too great for Minneapolis to ignore.”

Hodges also said the 2016 budget makes $750,000 in ongoing strategic cuts to departments, but did not offer more specifics. 

The City Council will hold budget presentations this fall with a final vote on the budget scheduled for mid-December. 

David Wheeler, a member of the Board of Estimate and Taxation, which sets the maximum tax levies collected by the city, said the proposed levy increase sounds reasonable given the city’s growth and the budget challenges faced by the city’s parks. 

“It seems to me [Hodges] is staying very consistent with what she thinks is important,” Wheeler said of the mayor’s budget address, which again focused on the importance of equity.

Minneapolis Downtown Council CEO Steve Cramer said the mayor has “addressed several priority issues for downtown.”

“Residents, workers and visitors will welcome the addition of dedicated police personnel. The [Downtown Improvement District] safety initiatives will benefit from this increased partnership,” he said. “Her focus on making Minneapolis more user friendly for business and development by investing in staff and technology will help facilitate further growth. And the workforce initiatives in the Mayor’s budget aimed at preparing new workers are a good response to an issue which is of growing importance to our employers.”

He said downtown employers are also eager to be part of the Minneapolis Working Families Agenda discussions.

Downtown property owners will also be tuned into discussions about the proposed levy increase. 

“A growing Minneapolis tax base is good news,” he said. “Much of that growth is in downtown, so the impact of higher valuations and a levy increase will be of great interest to affected property owners.”

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Highlights from Hodges’ 2016 budget address:

—   $10 million for 10th Avenue Bridge rehab project

—   $13 million for affordable housing

—   $750,000 in on-going “strategic cuts” to departments

—   Funding for two new police officers focused on downtown, allowing for 862 sworn officers

— Funding for 30 TechHire Initiative scholarships to provide women and people of color high-tech training 

—   $10 increase in city’s monthly contribution to each employer’s Metropass

—   Funding for two positions to redact video and handle other responsibilities for the police body cameras

—   Three times more money for restorative justice

—   Seed funding for a word gap project to help babies’ brains develop fully by the age of 3

—   An expansion of the matching grant program designed to improve the city’s air quality

—   $400,000 in a pedestrian-safety-oriented redesign of Vineland Avenue at the Walker Art Center

—   $400,000 to convert city-owned streetlights to LED fixtures

— $200,000 in supplemental funding for the 2016 presidential election to prevent long lines, voter confusion