Mayor R.T. Rybak outlined his plan Thursday for Minneapolis to weather another $9.2 million in state aid cuts, a job that he said is made less painful by previous financial decisions by the city.
Rybak, a DFL candidate for governor, used his speech to score some political points, chiding the state for creating the city's need for cuts by slashing aid to local governments and drawing a contrast with what he called prudent fiscal management by the city.
Rybak said one-time income, accelerated cuts already enacted by the City Council and a small amount of additional trimming will allow the city to rebalance the budget it passed in December before the state cut aid.
Rybak said his budget-balancing proposal will require no layoffs.
Minneapolis has trimmed its spending by $30 million in three rounds of cuts over the past 16 months as the state has slashed local government aids to help balance its budget. "I have to admit to being frustrated that has been done while comments from the state have often criticized the financial practices of this city," Rybak said.
The most recent aid cut to Minneapolis, which reaches $10.9 million when other bodies not under City Council control are included, was far less than it could have been. Gov. Tim Pawlenty's budget proposal would have cut $29 million in aid to the city, but the Legislature reduced that.
Citing favorable comments by credit rating agencies, Rybak contrasted the city's multiyear financial management with state policies that he said led to a rating downgrade for the state by one of those agencies. Rybak said state spending has risen eight times faster than city spending since 2001.
"The city is in good financial shape because we did long-term planning," he told reporters afterward.
Rybak said $4.5 million in planned cuts, intended to balance the budget in future years, had been moved to the 2010 budget, helping to absorb the latest state aid reductions.
The city also has about $9.5 million in one-time revenue from cutting last year's budget by more than the state cut aid and from a greater-than-expected yield from lapsed tax-increment financing districts. Rybak proposed using $3 million of that to offset the state aid cut, $2.8 million to lessen potential future borrowing for pension costs and $3.7 million to invest in projects that he said would lower future costs.
Rybak said the city would be paying another $10 million annually on debt had it not paid down debt levels and avoided unnecessary borrowing in previous years.
The proposal will be fleshed out Monday in the City Council's budget committee and is scheduled for a council vote on April 30.
Steve Brandt • 612-673-4438