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St. Paul City Council Passes 7.9 Percent Tax Levy Increase

St. Paul City Council Passes 7.9 Percent Tax Levy Increase

Call it the Goldilocks of tax levy hikes: lower than council originally proposed, and higher than what Mayor Chris Coleman wanted.

The St. Paul City Council didn’t override a mayoral veto of 8.6 percent levy increase on Wednesday.
 
But it didn’t do what Mayor Chris Coleman wanted, either — setting the max levy at 6.9 percent above this year’s. Instead, it adopted an in-between number: a 7.9 percent increase over the 2016 amount. That would produce about $1 million more than Coleman’s budget request.
 
The 4-3 council vote gave Coleman a tough choice. He could veto a 7.9 percent hike, just as he vetoed the 8.6 percent hike last week, even though the council again failed to muster the five votes that would have shown it had enough support to override any veto. But it wouldn’t have done much good: Because state law requires maximum levies to be set by the end of September, and because the council doesn’t meet again this month, the effect of a veto would be to have the levy stay at the 2016 level. 
 
That fact has led Coleman to decide to let the higher maximum levy take effect, but it doesn't mean he's going to accept a budget come December that spends it all. “The city council has three months to make its case,” Coleman’s communications director, Tonya Tennessen, said after the vote.
 
The council-adopted maximum is the ceiling for the levy; the actual hike, adopted in conjunction with the final budget, could be lower.
 
How does all this translate to dollars collected from property taxpayers? This year, the city is collecting $106 million; Coleman is requesting $111.1 million for 2017. The council-backed 8.6 percent hike, meanwhile, would have produced $113 million, while the measure adopted Wednesday would collect $112.2 million. The property tax is only one source of  money used by St. Paul to run government. Coleman’s total budget request in August had a general fund total of $265.9 million.
 
The 4-3 majority in favor of the 7.9 percent hike Wednesday was the same as it was for the 8.6 percent hike last week: Council President Russ Stark and Council Members Amy Brendmoen, Rebecca Noecker and Jane Prince. Stark said the extra money would give the council the ability to begin paying for a maintenance backlog in parks.
 
Voting no were Council Members Chris Tolbert, Dan Bostrom and Dai Thao. Tolbert said the city is conducting studies of unmet needs in both parks and the fire department, and it is premature to raise money until the council knows how to spend it. Thao said he thought the higher property tax would be an undue burden on taxpayers, especially low-income residents. Bostrom explained his vote by saying the city levy hike is much higher than Ramsey County.
 
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Coleman had initially asked for a 4 percent levy hike. But his August budget plan had taken advantage of an increase in state local government aid (LGA) adopted by the state Legislature. That $3 million disappeared when Gov. Mark Dayton vetoed the bill that included the aid, for reasons unrelated to the LGA increases. A hoped-for special session to re-adopt that measure along with capital spending and transportation plans never emerged from negotiations between Dayton and House majority Republicans.
 
Coleman wanted the higher levy to replace that $3 million that will no longer flow from the state. He said it would let the city add spending in areas of policy staffing, police-community relations and small business promotion. Not adopting a higher request would also have forced the city to search for other cuts in current operations.