Speaking before a standing room-only crowd at Minneapolis City Hall, Minneapolis Mayor RT Rybak pitched a 1.7 percent increase in the city's property tax rate for 2013.
While many Minneapolitans have been feeling the pinch of—and complaining about—high property taxes for several years, Rybak called the increase "modest."
"(A)t least 70 percent of Minneapolis homeowners should feel no increase—or will even feel a decrease—in the City portion of their property taxes next year," read a statement sent out by a Rybak spokesperson following the mayor's speech.
"We'll have to see what this feels like" to homeowners, Councilmember Elizabeth Glidden (Ward 8) told Patch, referring to the Truth in Taxation notices that are mailed to residents before the council votes on a budget.
The tax hike could have been much greater, Rybak said, if city councilmembers hadn't voted for this spring's Vikings Stadium deal. The deal, he said, saved taxpayers $5 million by setting aside hospitality taxes to help the city pay off a pile of debt left over from when it purchased the Target Center several years ago.
Councilmember Betsy Hodges (Ward 13), who chairs the council's budget committee, told reporters that she wanted to see the details underpinning the mayor's claim before commenting on the assertion. Hodges was one of six councilmembers to vote against the stadium deal. Rybak called out the deal's seven supporters during his speech, praising their "courageous" vote.
More Firefighters, Police
The tax increase would, in part, help pay for $3.6 million to hire several new firefighters and police officers.
The increases, Rybak said were not due to a shortage of police or firefighters. Rather, he said, it was to make sure each department was able to start training replacements for a number of looming retirements in each department, which the mayor characterized as a "silver tsunami."
Several of Rybak's critics have alleged both the Fire and Police Departments are understrength, although a recent independent audit of the Fire Department said the city was getting "excellent" service from its current staffing levels.
“We need, desperately, a new hiring class of firefighters,” Councilmember Gary Schiff recently told MinnPost. “We have to reverse course from managing the Fire Department through attrition.”
More Tax Hikes In The Future?
Looming over Rybak's suggested tax increase, though, was the knowledge that 2014 could see another, much larger increase. To fund the city's neighborhood organizations, several years ago the city made plans to set aside property taxes from certain commercial districts in the city, called Tax Increment Financing districts. Those plans will be stood up in 2014, effectively cutting Minneapolis' tax intake.
Hodges cautioned that the increase would likely mean another tax hike. While many factors, including the health of the housing market, impacted how a property tax increase "feels," Hodges said she was concerned a sudden jump from 2013 to 2014 would feel painful to many homeowners.
"I want to see what the options are" for smoothing out the impact of the consecutive property tax increases, she said.
The city council will soon begin wrestling with the details mayor's budget proposal, and will likely vote on adopting it in mid-December.