Rybak’s budget calls for a 1.7 percent tax levy hike

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August 15, 2012 by Sarah M

Mayor R.T. Rybak speaks with attendees of his 2013 city budget speech he gave at City Hall on Aug. 15.

By Nick Halter

Mayor R.T. Rybak today proposed a 2013 city of Minneapolis budget that would raise the tax levy by 1.7 percent.

Rybak, in his annual budget speech before the City Council, said that without the Vikings stadium package passed in May, the property tax levy would have increased by 3.4 percent. The city will use $5 million from sales tax to fund the Target Center, which had been paid for through property taxes before the stadium deal passed.

Kevin Carpenter, the city’s chief financial officer, said preliminary estimates show that about 70 percent of residential property owners would actually see the city portion of their taxes decrease. He said that residential property has lost value in the past year more than commercial property.

Carpenter, however, said the city was still running numbers on how much a 1.7 percent increase would affect owners of homes that have kept their value or gained value. Many Southwest Minneapolis homes have maintained their value through the recession.

Rybak’s budget would increase funding for the Police Department by $2.5 million to pay for a new class of non-sworn community service officers in January and to bring in a new recruit class to be hired as sworn officers in March.

His budget would also increase funding to the Fire Department by $1.1 million, which would allow the department to bring in 15 more firefighters. It’s unclear how many of those firefighters would take the place of retiring firefighters and how many might add to the 388 firefighters already employed by the city.

Overall, Rybak’s budget would add five full-time equivalent positions to the city’s payroll, Cartpenter said. He said some positions would be eliminated in a restructuring of the city’s Regulatory Services department, but others would be added in public safety.

The city currently has the equivalent of 3,656 full-time employees, 521 less than in 2002.

It’s worth noting that just because Rybak has proposed a 1.7 percent increase doesn’t mean that the City Council will eventually adopt a 1.7 percent increase. Council members will spend most of the fall discussing and making changes to Rybak’s budget.

Last year, Rybak proposed a 2 percent tax levy increase, but the City Council eventually adopted a zero percent increase. In 2010 he proposed a 6.5 percent increase but he and the City Council later agreed on a 4.7 percent hike.

City Council Member Betsy Hodges (Ward 13) chairs the city’s Ways and Means/Budget Committee. Last year, her committee helped pare down the property tax levy hike from 2 percent to zero. This year, she said, she doesn’t think such a reduction will be possible.

“I don’t, to be honest. I could be political and say, well, we’ll try and get there,” Hodges said. “Last year was an anomaly because of pension reform.”

Hodges said she’s concerned about the 2014 budget, which she expects to be more arduous that this year’s. She said she’s not sure if a 1.7 percent increase this year will position the city properly to deal with next year’s budget.

Council Member Meg Tuthill (Ward 10) praised Rybak’s proposal to increase public safety funding, but said she’d have to read more details of his budget before saying if a 1.7 percent increase was the right number.

“I’m always sad when we need to do these things, but I need to see where that 1.7 percent is. I know the mayor said it was for police and fire, but I have not seen the budget,” Tuthill said.

Carpenter said a detailed budget would be available next week.

The Minneapolis Board of Estimate and Taxation will vote on a maximum tax levy by Sept. 12. That board could, hypothetically, approve a maximum tax levy above or below 1.7 percent.

The City Council is tentatively scheduled to pass a budget on Dec. 12.

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