St. Paul Mayor Chris Coleman proposed a 6.5 percent increase in the city's property tax levy Monday in his annual budget address. That's a $44 per year increase on a median-valued home of $149,000.

Coleman didn't spare criticism of the anti-tax GOP-controlled Legislature, saying "the continued erosion of local aid doesn't prevent tax increases."

While hardly thrilled to increase the levy, Coleman said it was necessary to avoid cuts to the boots-on-the-ground police and firefighters. His budget came a month after the state cut local government aid to St. Paul by nearly $16 million for the remainder of 2011 and another $12 million for 2012.

"Shifting the state's challenges onto the backs of our cities doesn't erase our need to put police officers and firefighters on the streets," the mayor said.

He argued -- as he did unsuccessfully to the Legislature -- that without strong major cities, the state will falter. He noted that St. Paul sends $240 million in city sales and property taxes to the state every year. The city gets $63 million back, but that number continues to get squeezed, Coleman said.

Smart fiscal management of the city has allowed St. Paul to adjust for this year's local-government aid cut.

If it hadn't been for this year's $16 million aid cut, Coleman said he would have proposed a 0 percent levy increase as he did in 2010. The City Council adopted that proposal.

The council will quickly begin public hearings on the budget. The council sets the levy and adopts the budget in December, but it appears members are mostly signed on, given Council President Kathy Lantry's lengthy, warm introduction of the mayor before his speech.

Council Member Dave Thune said the increase is necessary. "The pretense of 'no new taxes' is a lie," he said of the pledge by the GOP-led Legislature. "They've created this problem and now we have to deal with it."

Council Member Russ Stark said, "It's a really tough situation that we're in and it has been for the past few years." The levy increase is "bigger than any of us would like it to be," he said, adding that he needs to see more details before deciding whether he will vote for it.

On the big projects, the mayor also said the city will redouble efforts to get a new regional ballpark in Lowertown where the St. Paul Saints would be a primary tenant. Coleman didn't mention the proposed Minnesota Vikings stadium in Arden Hills.

Despite hard times, he said work will soon be completed on the Farmers Market Flats apartments and it will begin at the Penfield apartments with the Lund's/Byerly's grocery store.

No libraries will be closed, although hours will be shaved. The city is moving ahead with upgrades to Sun Ray and Highland Park libraries. Coleman also wants to start replacing the snowplow fleet next year.

He touted the federally funded Promise Neighborhood and the city's Sprockets website as continued investments.

Coleman managed this year's cuts by leaving jobs vacant, refinancing the Riverfront tax-increment district and using cash reserves.

But next year the city will reduce the workforce by the equivalent of 50 full-time positions. About 20 city staff members were notified Monday that they will be laid off on Jan. 1.

The 2011 levy is $94.6 million. His proposed 2012 levy is $100.7 million.

Last week, Minneapolis Mayor R.T. Rybak proposed a 2 percent levy increase for 2012. At 2010 budget hearings, city property taxpayers voiced discontent for his proposed 7.5 percent increase. The Minneapolis City Council sliced it to 4.7 percent.

Coleman spoke from a new downtown bar, Amsterdam, in a space formerly occupied by POP! The restaurant closed a year ago and the city wrote off a $96,425 loan to POP! Amsterdam received a $43,500 Cultural STAR loan.

Rochelle Olson • 651-925-5035 Twitter: @rochelleolson