Property taxes take a back seat in Mpls. mayoral campaign

  • Article by: MAYA RAO , Star Tribune
  • Updated: October 19, 2013 - 10:03 PM

Minneapolis mayoral candidates have been largely quiet about property taxes that have gone up sharply over the past decade.

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Mayor R.T. Rybak

Property taxes have soared during Mayor R.T. Rybak’s 12 years in office, even leading to an all-out taxpayer revolt over double-digit jumps in their bills.

Some of the most prominent candidates running to replace Rybak, however, have been largely subdued about the hefty increases. Some of them have been in office during those tax hikes and would risk criticizing their own decisions, or those of a largely popular mayor.

The mayoral candidates “don’t see property taxes as a big problem … they aren’t going to call [Rybak] out on the property tax increases he did because they don’t want to have to be accountable for saying that when they raise property taxes,” said Kris Broberg, a property manager who protested the tax hikes several years ago.

Instead, candidates have focused on other issues, including closing the achievement gap, expanding public transportation, and growing jobs and population.

With the exception of a flat levy in 2012, every Rybak budget to this point has raised property taxes, and the city collects nearly double the amount of property taxes that it did when the mayor took office.

The potential impact of property taxes on the race was somewhat blunted when Rybak in August proposed a 1 percent decrease in the amount of property taxes collected to support the budget. Spurred partly by an increase in state aid, it was the first reduction since at least the mid-1990s.

Some candidates themselves have seen substantial increases in their property taxes. Former Hennepin County Commissioner Mark Andrew has the highest taxes of any of the leading candidates, at $12,529 for his home near Lake Harriet.

“They’ve come down — they were higher,” said Andrew, whose most recent campaign brochures focus on greening the city and boosting education.

Jobs, education and economic development have captured more attention this election, he said, adding that doesn’t mean the property tax issue is unimportant. “Some of the property tax increase was inevitable, and so I think people are looking forward,” he said.

During Andrew’s own time on the County Board in the 1980s and ’90s, county taxes saw double-digit increases for at least several years. But he says that now, property taxes must be the revenue of last resort, not first. Andrew and other candidates have talked about the need to find more private dollars to stretch government funding.

Taxpayer revolt

Minneapolis saw an outcry several years ago when taxes soared. Residents protested at City Hall and lambasted the mayor and council members for what they viewed as poor fiscal management. Some had tears in their eyes as they said they could no longer afford to pay their taxes.

Carol Becker, a member of the Board of Estimate and Taxation, said that changes in the way business and rental properties were taxed pushed the burden more on homeowners, who went from paying 35 percent of the property taxes in 1998 to 55 percent today. The recession further shifted the weight onto that group.

“It would be simple [for a mayoral candidate] to say, ‘I’m going to reduce taxes,’ but to actually do that would be really hard because there’s no fat left,” Becker said.

The Rybak administration has said that cuts in state aid, large pension obligations and the need to pay down outstanding debt drove the tax increases. This year, the city received a 20 percent increase in state aid and set aside $7 million in unspent funds from 2012 to help ease the tax burden. Minneapolis also has trimmed its payroll for years.

Becker said that projects like the proposed $200 million Nicollet-Central streetcar line — championed this year by mayoral candidates Don Samuels and Betsy Hodges, both council members — don’t help because they would take away money that could be going to reduce property taxes.

Candidates have put more emphasis on expanding the tax base by adding more residents and development to the city. They are talking about luring more people in by easing business regulations, building dense housing along transit corridors, and closing the achievement gap between white and minority children.

But people already leave Minneapolis or stay in the suburbs because of the property taxes, according to Broberg. He described that as a conflict with the goal of increasing the population.

‘Fiscal messes’

No one in the field of mayoral candidates has played a larger role in city finances than Hodges, who chairs the budget committee, and a south Minneapolis home she now owns with her husband has seen the sharpest property tax increase — 30 percent in five years — among the top candidates. Met Council Member Gary Cunningham had already owned the home for decades when he and Hodges married in 2011, after the increase had occurred. (“It has caused no marital fights … he understands,” said Hodges.)

They live separately because they represent different districts, and Hodges rents another home 3 miles away in Linden Hills.

The second-term council member said she is proud of the way she, Rybak, and other colleagues addressed the “significant fiscal messes” left over from the ’90s. She pushed a pension reform effort that saved millions of dollars and frequently mentions it on the campaign trail. Despite the uproar over property taxes several years ago, she said she doesn’t hear much about the issue from voters as she campaigns.

Some candidates have raised the issue. Park Board Commissioner Bob Fine has proposed to lower property taxes in the city by 5 percent, though he has not put forth a detailed plan to do so, speaking generally about how he would audit departments to find efficiencies. Cam Winton, as an independent with no elected or appointed experience, has been more comfortable than many of his opponents questioning City Hall spending and has emphasized cutting “red tape” to stimulate economic growth. Audit committee member Stephanie Woodruff, who experienced foreclosure and now rents, is pushing checkbook-level spending disclosures online.

On the North Side, where housing values have stayed low in the wake of foreclosures, a lack of investment and concerns about crime, Samuels pays just $2,082 in property taxes. He said he wants to pay more.

“I can, and I think that’s what a healthy community would be doing,” he said. “You should not have to create blight and violence and poor academic outcomes in order to achieve affordability.”

While candidates were preparing to “fight the tax battle” earlier in the campaign, he said, the focus has consistently stayed on crime and education, concerns that were also reflected in a poll conducted for the Star Tribune last month. Samuels said that concerns about schools and crime cause would-be residents of the North Side to look elsewhere, but he wants to lower taxes by steering the city’s planned population growth to north Minneapolis.

And as for Rybak’s own property taxes in southwest Minneapolis? They rose 24 percent to $8,247 in the last five years — on par or higher than the fluctuations in taxes for most of the top candidates running to replace him.

 

Maya Rao • 612-673-4210

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