Mayor Rybak's 2012 budget calls for zero percent tax increase

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September 26, 2011 // UPDATED 11:59 am - September 26, 2011
By: By Nick Halter
By Nick Halter

Mayor R.T. Rybak on Sept. 12 announced that his 2012 budget wouldn’t raise the property tax levy, a move made possible by elimination 90 city jobs.

It’s the first time Rybak, in his 10 years as mayor, has proposed a budget without a property tax increase.

According to city analysis, about 65 percent of homeowners would have the city portion of their tax bill stay the same or decrease. Another 25 percent would see an increase of less than 2.5 percent. Only 41 homeowners would see an increase of over 5 percent.

Rybak’s budget relies on the elimination of 90 jobs, with most of the cuts coming in the Police Department and the Department of Public Works.

Rybak outlined his budget in a Sept. 12 speech at CoCo Minneapolis, a business incubator located on the former trading floor of the Minneapolis Grain Exchange. He used the venue to underscore his speech’s theme of “a city that works.”

“To build a city that works, a city government needs to do two things well: control spending and taxes and make the right investments,” he said.

Ramping up street repairs

Rybak and the city had planned to borrow $93 million over the next five years for a capital improvement program that included street paving, lighting and other public infrastructure.

Rybak said this spring’s ugly pothole season made him re-think that level of investment, so he is proposing an additional $57 million into that 5-year-plan, with most of the money going toward street paving and some going toward street lighting and Central Corridor-related public infrastructure meant to attract development.

When asked if adding $57 million in debt to the city was kicking the can down the road, Rybak replied, “We’re selling bonds, but we’re selling bonds to pay off another debt, which is our potholes. An unpaved street is a debt to the next generation.”

No more firefighter cuts

When Rybak makes a public appearance these days, dozens of firefighters wearing yellow T-shirts also show up to protest cuts to the Fire Department.

The Minneapolis Grain Exchange building was no different, but unlike the City Council’s recent decision to lay off six firefighters, Rybak had good news for the yellow T-shirt crowd. He promised his budget would spare any firefighter layoffs or job eliminations in 2012. 

“If he’s holding the line on staffing numbers, that’s great,” said Firefighters Local Union 82 President Mark Lakosky. “If people retire next year and he doesn’t replace them and he gets to say there’s no cuts, that’s political rhetoric.”

For City Council Member Meg Tuthill (Ward 10), holding Fire Department staffing may not be good enough. The recent cuts to the Fire Department have her concerned about public safety for residents and visitors.

“I’m not so sure I’m comfortable with the levels we’re at for firefighters right now, so I’m waiting to see what the consultants come in at, because I am not comfortable with the fact we cut firefighters,” she said.

Police, street crews will take job cuts

Over half of all job cuts in the city, under Rybak’s proposal, will come from the Police Department and the Department of Public Works.

Those cuts include 17 police officers, 10 street workers and nine jobs from water works. The police cuts would come through attrition and reassignment and the public works cuts will come mostly by eliminating vacant positions, according to budget documents.

In addition, the city is cutting two attorneys, one from the Civil Rights Department and six from planning and community development.

Job cuts were not proposed for the City Council, the Mayor’s office or their respective staffs.

Zero percent doesn’t mean homeowners are off hook

While Rybak is asking for the same $280 million property tax levy this year as he did last year, it’s unlikely Minneapolis homeowners will be paying higher property taxes in 2012. 

The city’s tax levy is only one part of the tax bill. The total bill also depend on tax levies from the school board and the county board. 

The state eliminated the Market Value Homestead Credit, which will leave higher priced homes without their normal rebate.

Plus, Rybak is proposing a 4.4 percent increase to utility rates on a typical home. That would mean the total annual cost for sewer, water and garbage would jump from $952 to $994.

City Council Member Betsy Hodges chair’s  the city’s budget committee, which will hold hearings and makes changes to Rybak’s proposal. 

When asked if the city would consider lowering property taxes in 2012, Hodges was not optimistic.

“I would be surprised,” she said. “People would be uncomfortable. I would imagine there will be cuts in the mayor’s proposal that people will already be uncomfortable with. The (firefighter) cuts we made two weeks ago made people uncomfortable.”