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Minneapolis' 2008 budget relies on increase in taxes, fees

The City Council approved a 2 percent budget increase, which will help pay for some new police officers and firefighters, library renovations - and even a barn.

By Steve Brandt, Star Tribune

Last update: December 12, 2007 - 11:47 PM

The Minneapolis City Council adopted a $1.35 billion budget Wednesday that includes an 8 percent property tax increase and higher fees to pay for 18 more police officers, branch library renovations and other new spending.

The vote was 11-2 on the 2008 tax levy, with Lisa Goodman and Ralph Remington opposing it. Goodman cast the lone vote against the budget, saying it would be hypocritical to vote against the levy and support the budget.

"I have constituents in my ward who pay more in taxes than they bought their homes for," Goodman said.

Budget Chairman Paul Ostrow said the tax increase is necessary for next year, but he agreed with Goodman that the pattern of increases -- 8 percent each year for the past six years -- is not sustainable.

The proposal also includes higher fees for some city services. The average homeowner will see an increase of more than $31 per year, or 3 percent, in water, sewage and storm water fees.

City spending will go up by 2 percent next year. In addition to the new police officers, the city will hire three more firefighters and four more 911 operators.

The council voted 11-2 to reject a proposal by Remington to pay for two more officers out of the department's overtime budget. Budget Committee members argued that would undercut their efforts to hold police accountable for overtime spending.

There is also capital spending for library renovations at the Nokomis and Northeast branches, a community center in the East Phillips neighborhood, a new barn in Fridley for police horses, renovated bus lanes on Marquette and 2nd Avenues downtown and a Convention Center area pedestrian plaza.

The six years of 8 percent tax increases, set by council policy in 2002, are intended to offset cuts in state aid and help the city restore its finances in several areas. Those include meeting rapidly rising pension obligations and restoring solvency to the internal city funds for technology, equipment and self-insurance.

A homeowner's tax bite will depend largely on whether a property's value rose more or less than the citywide gain of about 9 percent, and how much of its taxable value was shielded.

Because home values have risen sharply until recently, and business got legislative property tax breaks several years ago, homeowners bear 57 percent of the city's property tax burden, compared with 32 percent in 1997.

Steve Brandt • 612-673-4438

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