Minneapolis ends decade of levy increases

  • Article by: STEVE BRANDT , Star Tribune
  • Updated: December 14, 2011 - 11:23 PM

Spending cuts, pension deal allow city to hold the line on property taxes.

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Dr. Xieng Lee took a look at two teeth that were bothering Marcia Hokenson at Southside Community Health Center in Minneapolis. Under the city budget, subsidies to community clinics will tumble 42 percent, meaning 2,020 fewer clinic visits in 2012.

Photo: Kyndell Harkness, Star Tribune

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The first Minneapolis budget in 10 years that doesn't raise the citywide tax levy won unanimous City Council approval Wednesday evening in an atmosphere markedly calmer than last year's anti-tax protests.

"It's a pleasure to come here and not be concerned about what's going to happen in 2012 with your property taxes," said David Sadler, a Lake Harriet area resident who frequently has called for property-tax reform. "Thanks, and you did a good job."

Thanks to spending cuts in city programs and similar efforts from Hennepin County and Minneapolis schools, taxpayers will get better news than they have in years. Hennepin County has adopted a slight levy cut and the schools levy is up by just over 1 percent. That means many more people should experience stable or falling taxes than expected earlier this fall.

However, homes with higher values that don't get the benefit of changes in the state's homestead protection or that held their value better than others will likely see increases, particularly in southwest Minneapolis and the Prospect Park area. Much of the North Side and near South Side should see cuts in their tax bills.

At Wednesday's hearing on the budget, only two of 10 speakers complained about their tax bills.

Mayor R.T. Rybak's budget proposal, the first he's recommended without a levy increase, didn't come without some pain.

The city's Department of Health and Family Support, for example, faces a cut of 27 percent. One cut means that city subsidies to community clinics will tumble 42 percent, meaning 2,020 fewer clinic visits in 2012. There will be 10 fewer police officers by attrition by the end of 2012. Firefighter cuts will remain in place. The city's subsidy of a cable-access network will drop by $100,000, forcing cuts. The budget cuts 104 positions from the city payroll; about half of them are vacant.

The 2012 budget will accelerate paving with a $45 million, five-year program that's expected to grow sharply in 2013 and go well beyond patching potholes.

One-last minute change cut the 311 budget by $125,000 or 4 percent, and featured a rare split between Rybak, who opposed it, and Council President Barbara Johnson.

The last levy not to rise was one Rybak inherited from predecessor Sharon Sayles Belton in 2002, a spending plan that actually cut the levy. A series of 8 percent property levy increases followed until last year when Rybak trimmed his original 2011 proposal to 4.7 percent in response to opposition.

This year he initially proposed a 2 percent tax hike but trimmed it to no levy increase. Overall, that means the city part of the tax bill next year should be level or drop for two-thirds of homesteads and a third of rental properties.

City utility charges, however, are rising by 4.4 percent, or $5.28 monthly, for a typical household. They likely will include $5 monthly in new fixed fees for water and sewer.

A main reason that the levy is stable is a pension deal between the city and retirees. Overall city spending will rise about 1 percent in 2012, in part due to higher health insurance premiums for city workers.

Steve Brandt • 612-673-4438

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