Rybak Pitches 2 Percent Property Tax Levy Hike

The mayor's proposed property tax levy increase is the smallest hike he's delivered while serving as mayor and is lower than the increase that was previously projected for the 2012 budget.

Minneapolis Mayor R.T. Rybak on Thursday released some details of his proposed 2012 city budget, including a 2 percent property tax levy increase-the smallest levy hike he's delivered in the 10 budgets during his tenure as mayor.

The 2 percent bump is significantly lower than the 6.7 percent levy increase that was previously projected for the 2012 budget. It adds $5.6 million for a $285.2 million total city levy, according to a report by the Star Tribune.

In a Thursday press statement, Rybak acknowledged that the city has recently received pushback from taxpayers: “Minneapolis residents have told us loud and clear that property taxes are too high and they want us to do everything we can to hold them down. After much hard work to hold the line on property taxes and spending, I am proud to propose a budget that cuts the previously projected increase of 6.7 percent down to just 2 percent and holds spending for basic services nearly flat. This is a balanced, responsible solution.”

Rybak also pointed out that the city currently spends 8 percent less and has 10 percent fewer full-time employees than it did a decade ago. It also paid down $130 million in debt during the period and regained its AAA credit rating last year, Rybak said.

The proposed plan relies on the successful merger of two closed pension funds-the Minneapolis Police Relief Association and the Minneapolis Fire Relief Association-which is expected to reduce taxpayers' obligations to those two funds by more than $17 million in 2012. The results of the merger vote will reportedly be announced by September 15.

Rybak cited a decline in the city's local government aid (LGA) from the state as a challenge. The city 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.

Rybak said that limited city spending and money from the pension funds made it possible to keep the tax hike low, but a report by the Star Tribune points out that the move was also reactionary, following backlash from Minneapolis property taxpayers last year.

Homeowners reportedly stormed City Hall in December, demanding further cuts before the City Council adopted a 2011 budget. The council responded by cutting Rybak's proposed 7.5 percent hike to 4.7 percent.

Rybak won't provide a full budget until September 12, almost a month after the normal schedule; the Star Tribune reports that the delay was caused by the May 22 tornado and the recent special legislative session.