A divided Minneapolis City Council has cut into Mayor Betsy Hodges’ first budget, reducing funding for a handful of programs in order to soften the blow of levy increases for taxpayers.
The council, meeting Monday as a budget subcommittee, engaged in a lengthy, sometimes heated debate before voting 7-6 to cut the mayor’s proposed 2.4 percent property tax levy increase to 2.2 percent. That amounts to about $620,000 less in revenue from property taxes — a savings of about $2.50 for an owner of a $180,000 house.
Council members reduced the mayor’s suggested support for the city’s convention center, its new Clean Energy Initiative, a disparity study planned for the Civil Rights Department, and on counseling and outreach programs for new homeowners. In a separate 7-6 vote, however, the council opted against Council Member Linea Palmisano’s plan to cut in half the $250,000 proposed for a new Office of Equitable Outcomes, a key initiative of the mayor.
Council members sparred over cuts some said would harm the city’s efforts to improve the lives of many residents, and Hodges dropped in to make a final plea for her $1.2 billion plan. But a majority of council members weren’t sold on all of the spending, calling some of the programs “enhancements” rather than basic city services.
Council Member Lisa Goodman noted that the cuts Palmisano proposed were largely for new plans created by the mayor, rather than ongoing services that have received funding for years.
“The council has the opportunity to put our stamp on this budget, and to think we’re not going to do it is ridiculous. … Every penny on the table does not have to be spent on something,” she said. “And the levy, cumulatively, is difficult for a lot of people to handle.”
The impact of changes to the total tax levy will vary; many homeowners will see an overall decrease in their property tax bill while others will get an increase.
The vote came after weeks of concern by some council members who said they were uneasy about the mayor’s proposed spending and tax increases.
Council President Barb Johnson voted for the levy reduction, along with Goodman, Palmisano and Council Members Blong Yang, Kevin Reich, Jacob Frey and Abdi Warsame.
Some of the six council members who voted against the changes said cutting spending on council priorities like sustainability and racial equity could lead to a loss of momentum and more funding battles in future years when the budget is tighter.
Council Member Lisa Bender, who successfully proposed removing two new equity positions from the chopping block, said money for programs like homeownership counseling would go a long way to help residents stay in their homes.
“If you want to demonstrate fiscal responsibility, I think there are other places in the budget that will not take from the people who need it the most,” she said.
Meanwhile, the council considered a long list of other budget tweaks proposed by council members. Several were largely procedural, directing city staff members to coordinate efforts like downtown activities and to begin new fire department training classes as soon as possible.
Others involved shifting or adding money. The council designated an additional $4 million for the city’s affordable housing trust fund, which had previously been set to receive a total of $9.1 million in city and outside funding.
Affordable housing advocates turned out in large numbers in November to the council’s budget hearing, asking the city to raise the fund allocation to $20 million — double the goal the city has set, but repeatedly failed to meet, for years.
The proposal from Council Member Frey shifts $1.5 million federal Community Development Block Grant funding that’s currently set aside in the budget for senior housing and owner-occupied rehab programs into the affordable housing fund, and could spend up to $2.5 million from city development accounts for affordable housing projects.
Frey said the city’s “opportunity gap” … “stems in no small part from the fact that we have very much a segregated city. And the way that you desegregate in some way is to put affordable housing in middle- and upper-income areas.”
The council also designated $100,000 in funding for HOMELine, an organization that provides information and advocates for renters, and $55,000 for security in public housing high-rise buildings.
A final public hearing on the budget will be held at 6:05 p.m. Dec. 10, before the council takes a final vote.