St. Paul mayor proposes tax hike to balance budgetby Marisa Helms, Minnesota Public Radio
St. Paul Mayor Chris Coleman today proposed to raise the city's property tax levy by 8.5 percent over last year. The mayor says raising taxes is necessary to plug a nearly $17 million budget deficit. Coleman made the announcement today in the first budget address of his term.
St. Paul, Minn. — Mayor Coleman's proposed property tax increase amounts to about $50 more per year for the owner of a median-priced home in St. Paul. Despite the fact that property taxes are going up, Coleman is hoping residents will view his budget as "better service, at a better price."
To fill a $16.5 million budget shortfall, Coleman proposes raising $5.5 million through higher property taxes. The rest will be made up in spending reductions including deferred payments, job cuts and restructuring, and limiting city and library spending to a growth rate of 2.5 percent lower than the rate of inflation. Coleman says the spending cuts will not leave the city worse off.
"In solving the difficult budget problem that the city faces, we have transformed our challenges into opportunities and seized this moment to make St. Paul an even greater city for all," Coleman said.
Coleman proposes reduction in hours and personnel in the many of the city's libraries, parks and recreation centers. But his plan would also increase the number of hours the downtown Central Library is open and provide free wireless Internet to a number of the city's 12 libraries. He says the park and recreation system will be reorganized to better align hours of operation with the times residents want to use them.
Coleman says his approach is innovative.
"Far too often, governments respond to tight budgets by simply reducing service," he said. "This is the wrong approach. Delivering better service at a better price means rethinking how we deliver that very service."
Coleman also proposes consolidating the city's inspection services into a new single department, and funding five new police officers.
And there's something new in the budget: A million dollars to renovate city buildings for long-term energy savings.
There are some losers in Coleman's budget. At least nine jobs at Parks and Recreation will be moved into lower pay grades, and some library jobs could be lost.
Coleman placed much of the blame for the cost-cutting and tax increases on losses in state aid. The city absorbed a $13 million cut in state funding in 2003. And state aid continued declining over the next two years.
State funding rebounded to $60 million this past year where it's expected to stay in the coming year. But that's still $16 million less than the city was counting on four years ago. Coleman says the state must stop increasing the burden on Minnesota cities.
"We have done what we have been asked to do," he said. "Now we ask the state to do what they need to do. Follow through on your promise of real property tax relief. Restore aid to cities throughout Minnesota. Give us additional support to put more cops on the street, more firefighters on rigs and more kids in rec centers. Help us keep property taxes low."
The budget plan drew little criticism from those attending Coleman's speech. Dave Titus from the police union welcomed the proposal to add to the city's police force.
"The number that he is talking about is 586, which would be the highest number that we've ever been at," Titus said. "We appreciate the direction he's going towards, but it's certainly not enough."
City Council members, who must approve the budget, called it a "good start" and "reasonable."
City Council member Dave Thune says he believes his colleagues will be receptive.
"He's going to get there because he achieved buy-in from departments, from employees, from citizens that were involved in the process," Thune said. "So, there's been more inclusion in this budget process than I've ever seen on the City Council."
Coleman does appear to have buy-in from AFSCME, the union representing library and park and recreation workers who face job losses. A representative says the union believes the personnel changes will benefit the city and taxpayers.
St. Paul residents face not only an increase in city taxes. Ramsey County may propose its own 5 percent increase, and the St. Paul School district just decided to bring a referendum to voters this fall to approve a $13.5 million per year increase for the next six years.
- All Things Considered, 08/02/2006, 5:44 p.m.