St. Paul City Council weighs largest tax increase since recession

St. Paul officials are considering the city's largest property tax levy increase since the recession — and setting up a budget fight with Mayor Chris Coleman's office.

In a 4-3 vote Wednesday, City Council members decided to set the maximum tax levy at $114.7 million, an 8.6 percent jump over how much the city collected in taxes this year. That's higher than what Coleman had proposed, and he may veto the hike.

Under the plan, the owner of a median-value home in St. Paul would pay $54 more in taxes.

The city's budgets during and after the recession have not adequately addressed deferred maintenance or met growing needs for city services, Council President Russ Stark said.

"There's this big pent-up need now to reinvest," he said.

Council members stressed that this is the maximum possible levy and they hope to find ways to lower the cost to taxpayers before finalizing the 2017 budget in December. But the highest potential levy has to be set this month.

If Coleman vetoes the 8.6 percent increase, the City Council will have to determine how to proceed at next week's meeting. If the two sides are at an impasse at the end of the month, the levy remains the same as it was this year.

Stark said this is the first time in the nine years he has served on the council that it has deviated from the mayor's levy proposal.

St. Paul started this year's budget process with a plan to hike the property tax levy no more than 4 percent. Then, state aid Coleman was banking on fell through and his proposed levy increase grew to 7 percent.

"While the state's inaction is creating a tough enough pill to swallow for property taxpayers in St. Paul and across the state, going above 7 percent is just bad policy, and the mayor won't support it," Tennessen said.

But council members said they are trying to respond to their constituents' needs.

The levy approved by the council would garner about $1.8 million more than the mayor's.

Approximately $300,000 could supplement fire and police vehicle costs, Stark said. In the past the city has dipped into the STAR program to cover those expenses. This would allow more cash to actually go toward STAR community revitalization projects, he said.

The mayor is putting money in his 2017 budget to study parks facilities and needs, and to look into fire department staffing and gaps in services, Financial Services Director Todd Hurley said.

"In my opinion, it's prudent to get those plans back before we start putting money into just spending," said Council Member Chris Tolbert, who voted against the 8.6 percent increase along with Dan Bostrom and Dai Thao.

Jessie Van Berkel • 612-673-4649