The big tax debate and vote ended last night at City Hall with Minneapolis homeowners facing a 4.7 percent increase this coming year. It could have been worse. The original proposed increase was about 6.5 percent.
The lower rate, passed along with the rest of the city's passed a $1.36 billion budget, came about through cuts in funding to the Neighborhood Revitalization Program funds. Thirty-six fire department employees will be cut, as will 24 members of the police department.
This is tough news in tough economic times. And, even for concerned Minneapolis homeowners, the math behind the budget and taxes can be daunting. That's why we raised an eyebrow at the weird cartoon character on the Minneapolis Taxpayers United website.
The group opposes all property tax increases in the city. It's at loggerheads with Mayor R.T. Rybak. And it led a protest last night before the City Council vote. But the little cartoon dude with the computerized voice does a masterful job of explaining the issue - at least from one point of view. (In the name of balance, here's the City's explanation. The mayor's is below the video.)
The cartoon comes courtesy of extranormal.com. You submit a script and pick out your character, and xtranormal provides the entertainment.
Here's the full text of Rybak's explanation for the tax increase.
Fiscally Responsible Minneapolis Budget Will Help Grow Economy, Keep People Safe City will spend 7 percent less in 2011 than in 2001
December 13, 2010 (MINNEAPOLIS) -- Minneapolis Mayor R.T. Rybak today praised the City Council's adoption of a fiscally responsible budget for the City of Minneapolis that will continue to keep residents safe and invest in growing jobs and the economy while spending 7 percent less than the City spent 10 years ago, after adjusting for inflation.
The Council adopted a budget with a 4.7% property-tax increase after approving a package of $6.1 million in additional cuts that Mayor Rybak and Council leadership proposed last week that brought down the increase from the 7.5% maximum increase that was certified in September. These cuts come on top of other cuts that the Mayor proposed in the budget he recommended in August, which called for eliminating approximately 80 positions in the City.
The Council also passed another $23 million in cuts that will be triggered in February if the governor's recommended State budget includes less in Local Government Aid for Minneapolis than the $87.5 million in aid that the State certified earlier this year.
"We heard the residents of Minneapolis," Mayor Rybak said. "They asked us to look for ways to make cuts and bring down the property tax increase, and we delivered on that. But they also told us they wanted us to keep providing the essential services of police, potholes and paychecks, and we delivered on that, too. This budget is focused on job creation because now is the time, as we are fighting to recover from the recession, to redouble our efforts on this front."
Over the last nine years, the City has paid down or avoided $130 million in debt, restored its AAA credit rating with all three national ratings agencies and structural balanced spending to revenue five years out, not one year at a time. In addition to shrinking spending by 7 percent after inflation compared to 10 years ago, the City will also have fewer full-time positions than it did 10 years ago.
City Council President Barbara Johnson said, "We heard from many constituents tonight, the vast majority of whom expressed a strong desire that we keep property taxes down. We have acted responsibly and are sharing the sacrifice."
Only 33% of the property taxes that Minneapolis residents will pay in 2011 will go to the City of Minneapolis: the rest will go to fund other levels of government and special levies, including Hennepin County, the Minneapolis Public Schools and the Minneapolis Parks and Recreation Board.
Council Member Betsy Hodges, chair of the Ways and Means Committee, said, "Minneapolis taxpayers demanded a lower levy, and we responded with a fiscally responsible plan that provides property tax relief in 2011, 2012, and 2013. We made real choices, tough choices that nonetheless reflect the priorities of taxpayers."
In addition to the $6.1 million in cuts that the Mayor and Council made to the 2011 budget, the Council also approved a package of cost savings for 2012, 2013 and beyond that includes budgeting for no increases in City salaries for two years and capping non-personnel spending in the old Neighborhood Revitalization Program while assuring funding for ongoing neighborhood programs.
Even with these cuts, most property owners' taxes will still rise in 2011, in some cases by double digits. This is because many of the factors that influence how much Minneapolis homeowners pay next year in property taxes -- skyrocketing obligations to closed pension funds that the City does not control, tens of millions in State cuts to Local Government Aid, the balance between commercial and residential property values, the recertification of a special taxing district and the state of the economy -- are out of the City's direct control.
In order to bring down the City's obligations to the closed pension funds, Mayor Rybak hammered home the need to for the Legislature to act to incorporate two of those funds, the Minneapolis Police Relief Association and the Minneapolis Fire Relief Association, into the Public Employees Retirement Association.
Mayor Rybak praised the City's partnership with residents and City employees.
"Minneapolis residents have been our closest partners through the difficult work we have done over the last nine years to provide core services while restoring the City's financial health. We know we have asked a lot of them and we will continue to listen to their concerns and ideas.
"City employees do heroic work: from our Public Works staff who have worked around the clock for the past several days to clear our streets of snow, to our economic-development staff who have helped put residents to work and mitigate the effects of the recession in our city, to our public-safety professionals whose tireless efforts have helped drive violent crime down 5% over last year. We know that we have asked a lot of them, too, and that we are asking them to sacrifice more, but we want them to know that we are very grateful for their partnership as well," Mayor Rybak concluded.