As I promised when we passed the 2011 budget, I am already working on next year’s budget with the top goal of keeping property taxes in check while maintaining as many high-quality City functions as we can afford.
I’ve been getting great input from residents at budget forums that I’ve been holding in neighborhoods around Minneapolis. I especially appreciate the support we’ve been receiving for reforming the closed pensions that drove last year’s tax increase. (Remember that the increase in taxpayers’ obligations to these closed pensions this year is greater than the total increase in property taxes collected this year. And remember that the court has ruled that the closed pensions have illegally overcharged Minneapolis taxpayers $52 million in recent years.)
We also got a great boost of hope last month from Governor Mark Dayton, when the Governor proposed maintaining the full amount in State aid (called Local Government Aid, or LGA) that Minneapolis has been promised for this year. Local Government Aid is the major help that the State provides to maintain core functions like police, fire and streets and keep property taxes down. (Although Minneapolis still helps the State much more than the State helps Minneapolis. More on that below.)
But this week we got some bad news on property taxes from the Legislature, and this is where we need your help urgently.
Today and tomorrow, the Minnesota House of Representatives is debating a bill to eliminate all of Minneapolis’ LGA — not just cut it, but eliminate it entirely. The bill starts by requiring us to eliminate $80 million worth of City functions this year alone and would eliminate all aid by 2014.
Make no mistake: this bill is a tax increase that the State is passing on to Minneapolis.
To give you a sense of proportion, $80 million is:
- Twice the annual cost of filling potholes and paving streets.
- The cost of salary and benefits for 800 police officers — nearly our entire force.
- Larger than the Fire Department, 911 and criminal prosecution combined.
Just so you know, on paper the bill proposes a $40 million cut this year — but because the cut would come halfway through our budget year, we’d have to cut $80 million to make up for it.
The bill wouldn’t raise property taxes this year, but it seriously compromises our goal of holding the line on property taxes next year.
The bill is also a job-killer. Minneapolis is the economic engine of Minnesota, but by 2014, we would have to cut nearly every City function that helps employers attract jobs, grows our economy and keeps our quality of life high.
I’m asking you to contact House Speaker Kurt Zellers of Maple Grove, Representative Greg Davids of Preston (chair of the House Tax Committee) and Representative Linda Runbeck of Circle Pines (chair of the House Property Tax Committee) and tell them that you oppose this bill to raise property taxes, eliminate core services and kill job growth in Minneapolis.
One thing to know: it would be bad enough if they proposed eliminating aid to all Minnesota cities, and I would oppose that strongly, too. But they’re not: they’re eliminating aid only to Minneapolis, Saint Paul and Duluth.
And don’t let anyone tell you that State aid is a “handout” or that Minneapolis taxpayers are “dependent” on the State. If anything, it’s the other way around: Minneapolis helps keep the State afloat. This year alone, we will send $367.5 million more to the State in sales and property taxes than the State has promised us back in LGA. State aid to Minneapolis is not a handout.
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