A 2009 Minneapolis city budget that's almost certain to be rewritten by pending state aid cuts and hoped-for federal aid was adopted Thursday night.

The $1.4 billion budget adopted by the City Council relies in part on the seventh consecutive 8 percent increase in property tax collections voted by the council. That's up slightly from the 6.9 percent Mayor R.T. Rybak proposed in August, and reflects a desire to begin socking away money toward a predicted additional pension deficit of at least $38 million caused by the sagging stock market.

The adopted budget supports Rybak's proposal to start to catch up on the city's lagging infrastructure investments by earmarking $5.5 million more annually beginning in 2009. The city's windfall from the sale of its interest in the Hilton hotel will be tapped for fixing arterial streets and parkways and related public works maintenance.

Council Member Scott Benson sought to divert some of the future infrastructure investment earmarked by Rybak for worker training and youth employment programs. His proposal failed 9-4 after Rybak promised that those programs, now partially funded by the Hilton fund, won't get shorted in the future.

Rybak will also get $2 million he wanted for circulation improvements in near the new Twins ballpark, with another $525,000 in reserve.

Much of the council's more than two hours of debate was consumed by setting parameters for using a bounty of about $24 million annually it won't start collecting until 2011. That money comes from development-generated property taxes yielded by long-standing development districts that expire next year but which the Legislature is allowing the city to restart to finance the Target Center and neighborhood programs.

The council voted down several proposals to put neighborhood funding more on a par with retiring the Target Center debt. The result is that the arena will get $10 million to $12 million annually, while neighborhood-directed spending gets $8 million and city-directed commercial revitalization gets $3.5 million. But the council decided that Rybak's proposal for city-judged competitive grants to neighborhoods should be eligible, and said neighborhoods can share the wealth if proceeds top $24 million.

The city and Park Board share of taxes on a $216,000 house would fall by about 3.3 percent or $41 next year. That's down only about $7 when all taxing jurisdictions are included. But that's before a voter-approved school referendum that raises taxes by about $170 on such a house.

Steve Brandt • 612-673-4438