Mayoral candidates spar over Shakopee's finances

When times get tough, elections can get rough. And that's what's happening in Shakopee.

After two years ago crushing a lone opponent with a fairly mild pitch to voters, Shakopee Mayor John Schmitt this fall is facing a field of three, including a City Council colleague. And two of them are coming at him with sharpened knives.

"We are being pounded by property tax increases," said C.J. Walor, a 47-year-old corporate consultant. "Since 2000 my property tax is up 132 percent. Something is wrong. This has got to stop. Maybe 'growth,' maybe being No. 1 in the state of Minnesota, is not such a great thing, if my taxes are subsidizing all this growth."

And Matt Lehman, a veteran council member, has created a website accusing his colleagues of authorizing a budget that is "completely out of control considering the foreclosure rates, job losses, home value depreciation, and anticipated federal/state tax increases looming."

The mayor counters by brandishing his own tax statements, which show that Shakopee residents are paying far less as a share of the rising value of their homes than they did years ago.

"Most everyone forgets," he said, "that taxes in the '80s were closer to 2 percent per thousand, where today it's 1 percent."

All this will be hashed out tonight, in person and on live television, as a candidate forum takes place at Shakopee City Hall and is broadcast on public-access cable.

In effect, the two sides are pointing to different columns on the same spreadsheet.

In 1997, Schmitt's own home was worth $108,000 for tax purposes and he was paying $1,976 to all entities combined (1.8 percent).

This year, his home is valued at more than twice that, $231,500, and he's paying $2,384 (1 percent).

In his eyes, that's taxing less; in his opponents' eyes, that's taxing more. Why, asks Walor, are all the new residents -- total residential property values exploded from $8.9 million in 2000 to nearly $30 million in 2008 -- not enabling each person's tax burden to fall?

Responds Schmitt:

"That's the fallacy in the whole business. Bigger is not beautiful. There's a point of economic break. New roads all have to be maintained. There's inflation in all the materials you buy." More than half the tax collections, "65 percent, go to public safety," he said.

Since 2000, the city's financial statements show, the school district's tax rate is down substantially and the county's is down slightly. The city's is up.

One important reason for that, Schmitt acknowledges, was a lawsuit from the region's homebuilders association that challenged the city's practice of collecting large sums of money from developers and squirreling it away to use for civic amenities such as a new library.

In that sense, the older rates could be considered artificially low, even as the dubiously legal practices they involved are now helping tamp taxes down because things like that have been paid for without bond payments now being made.

The fourth candidate in the race, 25-year-old Rachel Romansky, is taking a much softer line, making arguments with which Schmitt agrees. She argues, for instance, for the importance of supporting a sagging historic downtown area.

"There's a lot of empty buildings downtown," she said. "I'd love to see more retail there."

So would the mayor, who points to the need to lure a lot more of the estimated 5 million people who come through the city en route to Valleyfair, Canterbury Park, Mystic Lake casino, and other attractions, into downtown for meals and shopping.

Although she has lived in town for less than three years, she also thinks there's a need for a voice for the huge influx of newcomers on a council that's dominated by old-timers. At that, Schmitt smiles. To be truly considered a fully rooted local in Shakopee, he says, takes generations, not decades.

"I'm still not considered a 'local' and I came here in 1960," he said.

In an interview and on his website, re-elect-lehman.com, Lehman mentions a long list of grievances, including the city's unwillingness to turn back to taxpayers a $250,000 fund that built up for complicated reasons and could have been turned back.

"Matt's only interest is in reducing taxes for the sake of reducing taxism if you will," Schmitt counters. In this case, he said, the truth is that the city's finances are only going to get bleaker, and it's prudent to tuck money away for the turbulence that's coming.

Walor, an 11-year resident, said he respects Lehman's fiscal conservatism, but is warning voters that to elect him mayor will only have him switch chairs, leaving him equally outnumbered. Electing Walor, he said, will do more to change the balance of power.

As for the mayor, Walor said, he's a symbol of the city's shortsightedness in warring with the Shakopee Mdewakanton Sioux Community.

"The tribe is here to stay. Why not co-conspire with them? They're sharp people, and we don't have good relations with them. Let's put egos aside and do what's in our best interests."

Schmitt sighs and shakes his head.

"I meet with the tribal chair, and I'm very comfortable with him. But at the end of the day, we have differences of opinions and desires."

David Peterson • 952-882-9023.