Rybak proposes first property tax cut in his dozen years

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August 15, 2013 // UPDATED 10:42 am - August 16, 2013
By: Nick Halter
Nick Halter
Nick Halter

Mayor R.T. Rybak on Thursday proposed a 2014 city budget that lowers the property tax levy by 1 percent, the first time he has cut taxes in his three terms.

A 1 percent levy reduction would mean that 70 percent of homeowners would see the city portion of their property taxes decrease or stay the same, said City Chief Financial Officer Kevin Carpenter.

In what will be his last budget as mayor, Rybak also proposed new cadet classes of 30 firefighters and 30 cops. His budget would also expand 311 service to Saturdays.

His proposal would add $16 million to the capital budget to pay for street maintenance, bike infrastructure and pedestrian improvements.

Chief among pedestrian improvements would be converting 29th Street South into a pedestrian walkway from Uptown to Midtown.

His budget includes planning money for a second streetcar line that runs on Washington Avenue from downtown and along West Broadway in North Minneapolis.

“This budget I am delivering today, more than any other budget I have delivered, focuses on investments that pay off for many years,” Rybak said.

Last year the City Council approved a 1.7 percent tax levy increase. In 2011 Rybak The City Council approved a zero percent increase. In 2010 the City Council passed a 4.7 percent hike.

The departing mayor gave several reasons for the levy cut: A $12 million increase in state aid, from $64 million in 2013 to $75 million in 2014; pension reform; the Vikings stadium deal which frees up the city to use $5 million in sales taxes for property tax relief; and the city’s commitment to paying down debt over the past 12 years. The City Council also found $7 million in budget savings from 2012 and created a property tax relief account. 

According to city numbers, the city has lost about $450 million in Local Government Aid over the past dozen years. 

Rybak’s budget got mostly positive reaction from council members and mayoral candidates.

“This is kind of the light we were hoping for at the end of the tunnel,” said City Council Member Robert Lilligren (Ward 6), noting that he and the Council have had to make tough decisions in prior years about paying down debt and weathering the recession.

Council Member Gary Schiff said he’s got concerns about expanding 311 to Saturdays.

“I am going to pay close attention to whether or not the expansion of hours really increases access to the service or just redistributes phone calls to a weekend time,” he said.

Schiff praised Rybak’s vision for the city, particularly the idea of making 29th Street pedestrian-only.

“It’s a great idea,” said Schiff, whose 9th Ward includes some of 29th Street east of 35W. “Vacating that is going to make it much easier to pedestrians and bicyclists to access the Greenway because there’s not an on-ramp on every block, so to get to those on-ramps, you have to combat cars and traffic in order to get into the Greenway.”

Council Member Meg Tuthill (Ward 10) said something is needed on 29th, but stopped short of endorsing the idea. 

“Honey, it’s one big pothole,” Tuthill said. “I want to take a look at it. I am always supportive of pedestrians.”

 

Rybak comments touch on mayoral race

Rybak said one reason the budget was better in 2014 can be traced back to pension reform in 2011, which was led by Betsy Hodges, the 13th Ward councilwoman running for mayor, as well as council members Elizabeth Glidden and Barb Johnson.

“I’ve heard a lit bit of electioneer rhetoric criticizing the City Council for their role on pensions,” Rybak said. “I want to tell you this is one of the most important things the city has done. If any politician takes on this council for their roll on pensions, they need to know I have this Council’s back. They took an incredibly tough stand. It’s the only reason we’re able to do what we’re able to do today.

Rybak also called councilman and mayoral candidate Don Samuels a “rock solid partner” with him on the budget.

Mayoral hopefuls weighed in on the budget afterward.

“One percent feels about right to me. Of course I will have to dig into it, but I am proud of the tough fights I took on, and that I took on with the mayor,” Hodges told reporters. “Pension reform, fighting for Local Government Aid, putting the property tax relief account together feels really, really good.”

Mark Andrew praised Rybak’s vision for the city.

“My campaign has already endorsed a number of the initiatives outlined today, so we are very pleased with today’s announcement,” Andrew said in a statement. “He deserves praise for this document that articulates a great vision for the future of our city.”

Samuels also sent out a statement.

“There has been a lot of talk in this campaign about property taxes and the burden they are placing on families,” Samuels said in the statement. “But I am the only candidate in this race who was willing to join Mayor Rybak in making the tough calls to actually do something about it.”

Cam Winton offered both praise and criticism of the budget. Winton said the mayor is proposing spending in similar areas that Winton has prioritized on the campaign trail: road repairs, more cops and more firefighters.

But he said state aid increases came from state income tax hikes that hit Minneapolis taxpayers and he also raised concerns over new debt the city is taking on for streetcars and the Downtown East park.

“Adding more debt and expenditures — as the proposed budget would do — is a step in the wrong direction towards restoring our credit rating,” Winton said in a statement.

Rybak must go to the Minneapolis Board of Estimate and Taxation with his 1 percent reduction request. That Board includes six members, two of whom are elected.

One of those, David Wheeler, told the Journal he is satisfied with the 1 percent reduction and said before the budget was releases he expected a decrease.

Another Tax Board member is Bob Fine, who is also running for mayor. Fine said that since the city is getting an $11 million increase in state aid, it should be able to reduce property taxes by about 4 percent.

“That’s my feeling, but where I vote may be different,” Fine said. “I could vote for 1 percent and the city could reduce it even more.”

The City Council will have the chance to tweak Rybak’s proposal – and perhaps lower the levy – before adopting a budget in December.

 

Annual property tax levy changes since 2003

2003: Increase of 8 percent

2004: Increase of 1.1 percent

2005: Increase of 6 percent

2006: Increase of 7.4 percent

2007: Increase of 7.7 percent

2008: Increase of 8 percent

2009: Increase of 8 percent

2010: Increase of 7.4 percent

2011: Increase of 4.7 percent

2012: Zero percent

2013: Increase of 1.7 percent

2014: Decrease of 1 percent (proposed)