Jacob Frey unveiled the first budget of his mayoral term Wednesday. Photo by Dylan Thomas

In first budget, Frey focuses on affordable housing

Updated: August 24, 2018 – 3:25 pm

The $1.55 billion budget proposal includes a 5.6 percent property tax increase

Mayor Jacob Frey on Wednesday unveiled his 2019 city budget recommendations, emphasizing investments affordable housing, community partnerships and improving city government operations.

Frey described the $1.55 billion proposed budget as “laying a strong foundation for a stronger city.” It represents an increase of 9.8 percent, or $139.1 million, over the 2018 budget adopted by the City Council in December.

The mayor delivered his address while standing in front of a curtain of notes delivered by Make Homes Happen, a local housing advocacy coalition, each describing the importance of stable housing to an individual or family. He said the $40 million in his budget earmarked for affordable housing tripled any previous budget’s investment in what is currently one of the city’s most pressing needs.

“In 2018 alone, our city has already received 16 applications for support from our Affordable Housing Trust Fund, totaling $23 million. Now, that’s a record high for our city,” Frey said. “So, the good news is that people want to build affordable housing here in Minneapolis. The bad news is that this year we did not have the resources to support many of those requests.”

An infusion of one-time funds in Frey’s budget would push the trust fund, which is used to encourage the development and preservation of affordable and mixed-income housing, above $20 million in 2019. Frey would also expand the budget of Minneapolis Homes, a homebuyer assistance program that aims to reduce racial disparities in homeownership, to $5 million.

Turning to his budget’s proposals for community programs, Frey highlighted the work of Group Violence Intervention, a Health Department-led initiative to intervene in gang violence. He proposed more than doubling its budget to $660,000 to continue operations in the 4th Precinct and expand the program into the 3rd Precinct.

Frey also set aside $200,000 for development of a city identification card. City staff have been since late last year studying the development of a municipal photo ID, which could make activities like banking or renting an apartment easier for people without access to a state-issued ID.

The mayor proposed $500,000 for Village Trust Financial Cooperative, the state’s first and only black-owned and led financial institution, which he said would help reduce economic inequality. His budget also directed $25,000 toward the development of an African American Museum and Center for Racial Equity in South Minneapolis.

Among the good governance initiatives funded in Frey’s budget is an expansion of the city’s mental health co-responder program, which pairs mental health professionals with police officers responding to mental health crisis calls. The additional $280,000 in Frey’s budget would continue the program in the 3rd and 5th precincts and expand it to the 1st Precinct.

Instead of directly funding new police officer positions, Frey proposed directing $1 million toward placing civilians in non-policing positions within the Minneapolis Police Department, freeing up eight sworn officers to work on the street. He said sworn officers cost the city on average $28,000 more per year than civilian employees, not counting training and insurance.

“Converting these positions not only frees up sworn officers to build better relationships, it also results in more efficient and cost-effective work done by individuals specifically trained and educated in their fields, like crime lab forensics, body worn camera technicians and a new LGBTQIA liaison,” Frey said.

Spending on city operations goes up about 5 percent under Frey’s proposal, with inflation, proposed new spending and police and fire retirement fund obligations driving the increase, according to the mayor’s office.

The mayor’s budget comes with a proposed 5.6 percent hike in the city’s property tax levy. New development has increased the city’s property tax base by about 10 percent, meaning the overall tax rate is decreasing. Those property owners who haven’t seen the assessed value of their homes increase may end up owing less on their next tax bill from the city, Frey said.

Frey said he reined in the potential property tax hike by cutting or replacing city programs that “did not have the data to justify continued funding.” Those cuts included the $350,000 invested last year to develop collaborative safety strategies with Minneapolis neighborhoods, $250,000 for community-based policing strategies in the Downtown Improvement District and $200,000 in one-time funding for two health inspectors added last year in response to an expanding hotel and restaurant industry. Frey’s budget also reduces funding for Vision Zero, a Public Works initiative launched last year that aims to eliminate severe injuries and fatalities in crashes.

This was Frey’s first opportunity to craft a budget since winning election to the mayor’s office in November. The 2018 budget outlined by his predecessor, former Mayor Betsy Hodges, required a 5.5 percent increase in the property tax levy.

The 2019 budget is now in the hands of the City Council, which will review Frey’s recommendations for several months. A vote to adopt the budget is scheduled for December.