Minneapolis City Council overrides mayor’s veto of new fee on carbon emissions

The Minneapolis City Council voted Thursday to override Mayor Jacob Frey’s veto of a fee on carbon emissions.

Frey vetoed the measure last week, saying he supports the fees but that state law only allows the city to charge regulatory fees to recoup the costs of the program, so the city would have to hire staff, create the program and figure out how much it will cost to run the program before it could start charging polluters.

He said charging fees before then would invite a lawsuit that the city would likely lose.

But the council overrode his veto by a vote of 9-2, and then immediately voted to push back the start date seven months, to July 1. It also directed the administration to do a fee study by May 1, giving the council time to adjust the fees.

In the coming weeks, the council will vote on a budget amendment to allocate funding for the program and on an ordinance requiring entities to register and pay the fees.

A spokesperson for Frey called the veto override “purely performative” because immediately afterward, the council “had to clean up the mess that they made.”

“They quickly changed what they voted on, pushed back the effective date of the fee, and acknowledged that the fee they had set would have to change,” Frey’s spokesperson said in a statement. “We all agree on attaching fees to pollution. Our only ask was to do it the right way and the Council is now scrambling to make that happen.”

Earlier this year, council members asked city employees to come up with a plan for adding carbon dioxide to the pollution control system next year. That resulted in a report estimating that staffing would cost $180,000 per year for one full-time employee, and the report estimated carbon emission fees of $450 per ton.

On Oct. 2, Council Member Robin Wonsley proposed an amendment to city fees adding carbon dioxide to a list of pollutants regulated by city’s Pollution Control Annual Registration program, or PCAR. The fees are based on emissions data collected by the Minnesota Pollution Control Agency.

Her measure would charge the city’s 36 biggest emitters $452 per ton of carbon dioxide, but that amount could change after the fee study.

Wonsley said climate change is an emergency, as evidenced by the recent devastating hurricanes in North Carolina and Florida. Gases like carbon dioxide drive climate change by trapping heat in the Earth’s atmosphere. She said she tried to work with the Frey administration on the fees for more than a year, but the city has a “troubling dynamic” where a council member can spend two years doing “due diligence” and work on an issue and then have the Frey administration criticize “the process we’re expected to use.”

Council Member Katie Cashman unsuccessfully sought an amendment that would have taken the $452 fee amount out of the measure and wait to see what the fee study recommends. Frey attended that part of the council meeting and said he supported her amendment.

But Wonsley said if a fee study advises a different amount, the council can modify it later.

Frey asked City Attorney Kristyn Anderson for legal guidance, and she reiterated that the city can only charge fees to recoup the program costs. She advised the council not to “put the cart before the horse.” She said leaving the exact amount in the measure was premature and was just an estimate, and she said the city won’t charge the fee until it’s based on actual costs.

Frey supports the fees; when he was on the council, he led the push to add fees for some air pollutants to the pollution program.

“They’re trying to create a fault line where none exists,” he said in an interview. “We want to do it the right way so it’s legally defensible.”

Thursday’s measure was approved by Wonsley, Cashman, Jason Chavez, Jeremiah Ellison, Aurin Chowdhury, Jamal Osman, Aisha Chughtai, Emily Koski and Elliott Payne. It was opposed by LaTrisha Vetaw and Andrea Jenkins. Council members Michael Rainville and Linea Palmisano were absent.

Last year, the council passed a climate equity plan to cut pollution, with a goal of cutting greenhouse emissions by 75% by 2030 and reach net-zero carbon emissions by 2050. That will mean more energy-efficient buildings, electric vehicles and green spaces, and recycling more waste.

At $452 per ton, the new fee on carbon emissions would amount to a few hundred dollars for most entities, but the top three would be: Cordia Energy, a private company that provides heat and cooled water in the downtown business district, which would be charged an estimated $106,000 annually; north Minneapolis roof tile manufacturer Owens Corning, which would be charged about $96,000; and the Hennepin County Energy Center, which produces steam and chilled water to heat and cool county buildings downtown, and would pay about $29,000.