St. Paul set to tackle deficit

Last update: May 7, 2008 - 1:13 AM

It's budget season, and St. Paul city officials are already counting on having to make up a $13.1 million gap.

The city's expecting about $7.7 million in increased spending -- inflation, energy costs, health insurance, pensions and salaries. It's also expecting revenue to drop about $5.4 million, said Matt Smith, the finance director.

The shortfall isn't a surprise, Smith said, because it's part of a four-year plan to get spending and revenues on equal footing.

Directors of the various city departments have been told to absorb some inflationary costs, limit spending and focus on "better service at a better price."

Homeowners might not get hit too badly in property taxes this year because of declining home values and increasing commercial property values, Smith said.

In December, the City Council approved a 15 percent increase in the property tax levy to make up a $17 million deficit in the 2008 budget, which is $565 million.

Although a levy amount hasn't been proposed for 2009, mayoral spokesman Bob Hume said it could increase by less than 10 percent.

Mayor Chris Coleman is expected to have his proposed budget by mid-August.

CHRIS HAVENS