Significant cut to property-tax growth

Minneapolis residents have told me many times that your property taxes are too high, and I’ve heard you. This is why yesterday, I proposed cutting the previously-projected 6.7 percent increase in next year’s property-tax levy to just 2 percent. Along with that, I proposed holding spending for basic City services nearly flat next year.

Just one year ago, when we finalized the 2011 budget, we projected that another property-tax increase of 6.7 percent would be necessary for 2012, due to skyrocketing closed-pension costs and other costs. This was even after we cut spending significantly this year, when we’re eliminating around 100 full-time positions.

That projected 6.7 percent increase for next year was unacceptable to me and unsustainable to homeowners who want to stay in our city. Through working hard to keep holding the line on spending, and to reach a compromise agreement to merge two closed-pension funds that have been the source of large tax increases in recent years into the State’s professionally-run PERA retirement system, I am able to propose cutting the size of next year’s tax increase by $13 million.

In my view, this solution goes a long way toward meeting the need to cut the growth of property taxes and the need to continue providing the core services that keep our streets safe and paved, our neighborhoods clean and healthy and our economy growing for the future, all of which our residents, commuters and visitors rely on.

All this comes at a time when we continue to be squeezed by rising costs, such as for health care, and by the Legislature’s unwillingness to balance the State’s budget sustainably.

Despite these challenges, it’s important to remember that over the past decade, Minneapolis has been fiscally responsible: we now spend 8 percent less a year than we did 10 years ago, we have 10 percent fewer full-time positions than we did 10 years ago, and we’ve paid down $130 million in debt and restored the City’s AAA credit rating. In this time of financial turmoil at so many levels of government, this record reflects well on Minneapolis.

The process of building the City’s 2012 budget has been underway for some time. I got started right at the beginning of this year when I organized a series of public forums in the neighborhoods most affected by property-tax increases so that I could get your feedback in person about how we could do more to hold the line. You gave me a lot of great ideas that will be in my full budget proposal, which I will release on September 12.

We’ve also worked hard at the State Capitol to hold the line on property taxes, whether through fighting for the Local Government Aid that Minneapolis deserves or reaching a compromise to end the broken closed-pension system that has overcharged taxpayers for years. It’s been a tough environment and we haven’t won everything we’ve wanted, but we’ve made progress.

But the 2012 budget process is far from over. After I release my full budget proposal next month, the City Council will hold many hearings on it, and you should express your opinion to your Council member. There will also be public hearings on the budget later this fall, so watch your mailboxes for that information.

Finally, let me know what you think. City Council members and I can’t solve our complex, many-layered budget challenges by ourselves. When we work in partnership with residents, however, we have a much greater chance of striking the balance we need.

I value that partnership and look forward to working with you over the next several months to hold the line on property taxes and keep Minneapolis a city that works.


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