Minneapolis is moving to restrain increase

An amended proposal to dampen next year's property tax increase in Minneapolis was sent to the City Council on Wednesday as part of a $1.36 billion budget that will shrink the fire and police departments by dozens of uniformed workers.

The plan, adopted unanimously by the council's budget committee, still contains tax increases that some homeowners have told City Hall they can ill afford. It also drew opposition from some neighborhood activists, although the committee tempered a freeze on neighborhood group spending.

The proposed 2011 budget, to be voted on Monday by the council, would raise the total property tax levy by 4.7 percent. That's lower than the 7.5 percent used for last month's notices of proposed taxes, which prompted taxpayers to flood the council with protesting calls and e-mails.

The city hasn't yet released what share of homes will pay higher taxes under the lower tax proposal. At the 7.5 percent level, more than 90 percent of residential taxpayers faced higher bills.

Still, the city's portion of next year's property tax bill would be $73 higher under the plan for a house that is worth about $197,000, compared to no levy increase. However, homes that held their value best should still see much higher taxes.

80 jobs might be lost

The proposal trims 80 positions from the city's payroll. The city would shed 32 firefighter jobs, which means one rescue rig won't have a crew. It would have 24 fewer police than when Mayor R.T. Rybak's budget proposed a 6.5 percent tax increase in August. He later asked for up to 7.5 percent.

But under his "Plan B" scenario, that money vanishes if the city gets no more state aid than it did this year. Even that much aid is looking increasingly doubtful, given a massive state deficit.

Also lost without more state aid would be money the city wanted to stockpile for a jump in pension costs and funding for mostly residential street repairs.

Although the budget committee took no public testimony Wednesday, a number of neighborhood advocates showed up out of concern over a last-minute proposed deal involving changes in neighborhood funding devised by Rybak and council leaders.

That plan stems from $6.2 million in last-minute budget cuts added this week to meet taxpayer discontent over tax hikes. To make sure future budgets are balanced, the proposal asks for city workers to take a two-year wage freeze to be negotiated later and would divert about $5 million both in 2012 and 2013 originally dedicated to future neighborhood programs.

Neighborhood leaders fear that such a diversion of income from development districts would become habit-forming to balance the city's budget. They also objected to the deal's proposed freeze on unspent funds in the second phase of the Neighborhood Revitalization Program. Amendments on Wednesday make clear that not all discretionary neighborhood funding will be frozen, and officials said they'll continue a previously arranged $3 million in funding next year to support the city's 71 neighborhood groups in carrying out activities to engage residents in local affairs.

Rybak spent the climax of what has been described as one of the most grueling budget-crafting sessions in years at a summit on regional economic growth in Chicago, but aides said he kept in touch via phone and text message.

The committee approved his proposed $150,000 contribution to an economic development consortium that proposes to hire a high-paid recruiter to seek business for the region. It rejected Council Member Gary Schiff"s proposal to limit that person's compensation to $250,000.