Coleman Calls for 6.5% Property Tax Levy Boost

The St. Paul mayor's proposed budget includes $6.2 million in cuts to city departments and a 6.5 percent boost to the city's property tax levy.

St. Paul Mayor Chris Coleman on Monday outlined his proposed 2012 city budget, which includes a hike in the property tax levy and cuts stemming from a decrease in state aid.

The city will experience a $12 million cut in local government aid (LGA) from the state in 2012, Coleman said. LGA is a state program that provides general purpose financial support to cities and is meant to provide property tax relief. The city will receive $50 million in LGA in 2012.

Coleman's remedy for offsetting those cuts in state aid involves $6.2 million in cuts to city departments and a 6.5 percent boost in the city's property tax levy. The city didn't increase the levy last year.

To provide some context, city spokeswoman Clarise Tushie-Lessard told Twin Cities Business on Monday that under the proposed tax levy hike, someone with a home valued at $149,300 would see their property taxes for the year rise about $44.

Coleman said that his proposed budget would “maintain the current strength of the police and firefighter force, as well as the city attorney staff.” It would also add new, more efficient vehicles for the police and fire departments. Coleman also said that his proposed budget for the city's general fund includes less spending in 2012 than in 2011, despite inflation and rising health care and energy costs.

The city's 2011 general fund budget is about $230.6 million, while the budget proposed on Monday by Coleman would total about $229 million, according to Tushie-Lessard.

“I believe that you need look no further than the City of St. Paul to see how to properly manage a budget,” Coleman said in a statement. “This budget prioritizes public safety, emphasizes our work surrounding education, and moves our city forward with smart investments in critical infrastructure.”

The proposed budget would allow the city to move forward with “several key investments,” Coleman said in his budget announcement. The city's planning and economic development department “will continue to pursue every opportunity to maximize development along the Central Corridor and across the city.”

For example, in addition to completing construction of the Farmer's Market Flats development, the city will move forward on the previously announced Penfield development, plans for which include a 30,000-square-foot Lunds grocery store and about 250 apartments. The city will also break ground on the Payne-Maryland joint library and parks facility.

Coleman also said that the St. Paul Area Chamber of Commerce and business owners have voiced support for new parking meters downtown, and the budget will include the cost of installing new meters. Additionally, the city will continue to pursue the development of a new St. Paul Saints ballpark.

The St. Paul City Council will now begin budget hearings, and the council will adopt itsfinal budget and levy in December.

Coleman's proposal for a 6.5 percent property tax levy increase comes less than a week after Minneapolis Mayor R.T. Rybak pitched a 2 percent property tax levy hike in his neighboring city-marking the smallest levy hike he's delivered in the 10 budgets during his tenure as mayor.

Rybak also cited a decline in LGA from the state as a challenge. Minneapolis recently announced a series of cuts to make up for $23 million in LGA that was lost under the state budget agreement reached by legislators on July 20. Rybak also wants to transfer $1.75 million from the city's contingency account to help reduce the number of cuts necessary to the fire department.

Coleman delivered his budget address on Monday from Amsterdam, a new bar in downtown St. Paul.