Hodges proposes 2.4% levy increase, more spending on public safety

Minneapolis Mayor Betsy Hodges wants to raise $6.7 million in new taxes next year to increase spending for public safety, Nicollet Mall and to improve economic and housing opportunities for minorities.

The mayor's first budget proposal offers her most detailed blueprint yet for her goals of improving racial equity, growing the city and improving public services.

"When we voted, we asked to reach for something beyond what we had ever before imagined for ourselves," Hodges told the City Council on Thursday. "Today's budget, Minneapolis, is about taking major steps toward that vision."

The 2.4 percent increase in tax collections would be the largest hike since 2011, though far lower than back-to-back years of 8 percent increases during former Mayor R.T. Rybak's administration. Rybak faced a revolt over tax increases in 2010 and kept his levies modest in the last several years, including a reduction in 2014. Hodges proposal comes a year after Minneapolis got its first boost in state aid in years, with legislators hoping the new money would drive down property taxes.

Hodges, the City Council's former Budget Committee chairwoman, now faces selling her package to a City Council packed with young and ambitious members who must approve a $1.2 billion spending plan by December.

The mayor's plan is facing early skepticism on the council.

Council President Barb Johnson said she wants to examine whether the city really needs to increase the levy as much as the mayor wants, given how much additional state aid the city has received.

The impact of the levy on homeowners will depend on how the tax base has changed and the value of individual homes. The mayor's office said homes with values increasing less than 7 percent — about half the residential properties in the city — would not see an increase in the city share of their tax bill. That does not account for other entities with their own levies, such as Hennepin County and the school board.

"More than half of the proposed levy increase … maintains the status quo," said Hodges, referring to the inflationary costs to continue existing services. "When we voted last fall, however, we didn't vote for just the status quo. We didn't vote for business as usual."

Hodges said she was elected to end racial disparities and thoughtfully grow the city, which her budget invests in. She also said bills are coming due for a special paving program that began in 2008.

The most significant new spending is in the area of public safety. Hodges wants to spend nearly $2 million to hire 20 community service officers and an 18-person police cadet class, two of the most reliable feeders for the city's police force. To drive down crime, she wants to boost the number of officers to 860, which is above last year's budget but equal to the figure Chief Janeé Harteau has said she hopes to reach by the end of the year.

Hodges wants to spend $1.1 million for police to wear body cameras, a program she trumpeted during her campaign that she hopes will reduce use-of-force complaints. She also plans to hire four extra operators at the city's 911 center.

"So it's not a change," said Council Member Blong Yang, chair of the city's public safety committee. "It's keeping steady, I think."

Of the boost to the 911 staff, Yang called it, "slight increase … not a huge increase."

To keep up with firefighter retirements, the mayor proposed spending $800,000 on two new recruit classes, with the expectation that funding for one class would continue annually into the future. With more staff, the department is planning to reactivate a ladder truck that was shuttered in Northeast.

The renewed focus on fire department spending drew praise from fire union president Mark Lakosky, a frequent Hodges critic over the years. Lakosky said each recruit class of 20 usually graduates about 15 firefighters. He estimates the department could lose up to 11 firefighters next year, mostly through retirements.

Targeting racial disparities, Hodges proposed adding another $1 million to the city's affordable housing trust fund — for a $3.15 million local contribution. Combined with other sources, it would bring the total contribution this year to $9.1 million, the mayor's office said, which remains short of a previous city goal of $10 million.

Other major spending includes a $3.5 million contribution to the Nicollet Mall renovations and $750,000 to expand protected bike lanes in the city, along with money for clearing snow from bikeways and sidewalk corners in the winter.

"Our intent is to create a bike system not just for recreation and exercise, but for commuting as well," Hodges said.

Hodges' first budget comes during a time of growth for the city. She said the city has already surpassed $1 billion in the value of construction permits this year, which did not happen until October in 2013.

"Growth in cities is quickly becoming the status quo rather than a new trend," Hodges said. "People across the country continue to move into our urban cores."

The mayor's office did not release the line-by-line details of the budget Thursday. The city's Board of Estimate and Taxation will set the maximum levy in September, with council review slated to begin in October.

"As the tax base is growing that means we're having more people using the city and there's more pressure for services and for us to take care of them," Gordon said. "And the only way we can actually see the benefit of the tax base growing is to increase the levy."

Eric Roper • 612-673-1732