Rybak's budget cuts city spending, raises property taxes

Minneapolis Mayor R.T. Rybak has proposed a $1.3 billion budget for next year. Under Rybak's plan every city department will sustain spending cuts, but police, fire and public works will sustain the smallest percentage of reductions.

He also calls for revenue increases through a property tax hike, and a special levy to pay for increases in the city's pension obligations.

Rybak unveiled his proposed budget this afternoon, saying the city is faced with a series of financial pressures which force city departments to continue doing more with less. The mayor blamed the recession, rising health care and pension costs, and a $21 million cut to state aid.

Rybak's budget would cut $19 million from the city's general fund, and eliminate more than 200 mostly unfilled city positions. It would also rely on a series of smaller cost-cutting measures, such as consolidating cell phone plans in the police department.

Rybak said many of the cost savings were initated by city employees.

"We're installing LED traffic lights in Public Works, which saves about $30,000 in electricity costs. And we're eliminating a health department newsletter which saves $2,000," said Rybak. "Scores of small savings are throughout this budget. But they add up, and they mean something."

Rybak says starting this fall, city employees will start taking voluntary unpaid leaves of absence. However he didn't have numbers for how much that could save.

The mayor also proposes raising $28 million in revenue through tax increases totalling 11 percent.

Rybak says the regular property tax hike accounts for 4 percent, and a new revenue policy would add another 7 percent increase on all properties in the city. That additional revenue would be used to help pay the city's increasing pension obligations.

"Let me be very, very clear. This does not mean everybody's property taxes will go up 11 percent. There are many other factors at play," said Rybak. "The actual impact on the average home in the city of Minneapolis will be an increase in 2010 of 6.6 percent."

City officials say for a house valued at $216,000, the increase would mean an additional $80 per year in property taxes.

Rybak's budget proposal also preserves funding for a road and bridge maintenance program. And thanks to a federal grant, the police department will be able to hire 20 new police officers at the beginning of next year.

Police chief Tim Dolan says the department has also saved nearly $2 million in overtime costs, due to a decrease in crime.

"We were spending over half a million dollars a year just for overtime downtown for summer patrols. We're not doing that anymore," said Dolan. "We're not spending a single extra overtime dollar from the city."

Earlier this week, St. Paul Mayor Chris Coleman also proposed a property tax increase and employee layoffs -- but like Minneapolis, will take advantage of money from the Obama Administration to hire 34 police officers.

Next week, the Minneapolis City Council will begin reviewing up Rybak's proposal.

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