Mayor Rybak, City Council Approve 2013 Budget that Invests in Roads, Safety, Growth and Reform
Budget with decrease in spending represents payoff for decade of tackling financial challenges
70 percent of homeowners feel no increase, or a decrease, in property taxes
December 12, 2012 (MINNEAPOLIS) — Minneapolis Mayor R.T. Rybak and the City Council today unanimously approved a 2013 budget of $1.085 billion for the City of Minneapolis that makes major investments in infrastructure, public safety, economic growth and reform, particularly of the Department of Regulatory Services.
City of Minneapolis spending will decrease by approximately 3 percent in 2013 compared to 2012.
Seventy percent of Minneapolis homeowners will feel no increase, or even a decrease, in their City property taxes in 2013.
The 2013 budget represents the payoff for more than a decade of solving tough financial challenges that the City once faced.
- Paying down debt. The City has paid down or avoided $241 million in debt since 2002 and restored its AAA credit rating.
- Reforming pensions. After years of effort, the City succeeded in merging into the State’s PERA retirement system several closed-pension funds whose taxpayer-funded obligations were exploding. In 2012 alone, this reform saved taxpayers $20 million. Minneapolis will also retire all its pension debt in 2012.
- Holding the line on wages. The City partnered with employees to hold the line on wages at several points during the last decade, which has saved jobs and help hold down property-tax increases. Mayor Rybak thanked City employees for their partnership.
- Target Center. From 1994 through 2012, Minneapolis property taxpayers were saddled with Target Center costs. As a result of the Vikings stadium deal that passed earlier this year, $5 million in annual Target Center costs were lifted off the backs of Minneapolis property taxpayers.
Had the City not tackled these tough financial issues over the past decade, Minneapolis taxpayers would be paying 35 percent more in property taxes than they currently are.
The overall increase in the 2013 property-tax levy is 1.77 percent. This below-inflation increase is half of what it would have been if the Vikings stadium deal had not passed earlier this year. Again, 70 percent of taxpayers will not feel this increase, or will see a decrease in their property-tax bill.
Mayor Rybak said, “This is a good budget for Minneapolis residents in 2013, but we can deliver it only because of 11 years of tough choices by current and past Minneapolis residents.
“I’m especially pleased that in this budget, we are making a major investment in our streets next year. Every resident, visitor and business will notice these much-needed improvements,” Mayor Rybak added.
Council President Barbara Johnson said, “This budget prudently holds the line on expenditures, and very few residents will see a tax increase.”
Council Member Betsy Hodges, chair of the Council’s Ways and Means/Budget Committee, said, “I’m proud of our hard, detailed work on this budget, and of the investments we’re making in public safety and reform. Our work will ensure that we stay the course of financial responsibility and invest in making City services more responsive.
“I would like to thank City department heads and staff for their dedication, their willingness to watch taxpayer dollars carefully and their constant efforts at improving how we deliver services to the public,” Council Member Hodges added.
Regulatory Services reform
The budget that the City Council passed this evening is very similar to the budget that Mayor Rybak proposed in August. The most significant update to the Mayor’s budget proposal is the development of the reform of the Department of Regulatory Services, which the Mayor promised in his August budget speech.
With the adoption of the 2013 budget, the Business Licensing, Development Review and Construction Code services will move to the Department of Community Planning and Economic Development, while Environmental Health services will move to the Department of Health and Family Support. The Housing Investigation, Problem Properties, Animal Control and Traffic Control divisions will remain in the Department of Regulatory Services.
Savings from this reform will total $300,000–400,000 in the first year alone.
Council Member Elizabeth Glidden, chair of the Council’s Regulatory, Energy and Environment Committee, said, “We spent many hours delving into the best way to deliver these critical core services. This reform puts into place a new structure for providing them more effectively and more efficiently, and creates more opportunities for partnership with businesses and residents.”
Mayor Rybak said, “Despite some opposition, a strong majority of Council members supported this essential reform and worked collaboratively over the past several months to improve it. As a result, doing business in Minneapolis will become even easier.”
2013 budget investments
Infrastructure
Minneapolis is at the end of the first year of a five-year, ramped-up investment in infrastructure that Mayor Rybak announced in last year’s budget address. This level of investment follows the end of the five-year Infrastructure Acceleration Program that has improved an additional 104 miles of streets.
With the passage of the 2013 budget, the City’s level of infrastructure improvements in 2013 will be three times higher than previously planned. This level of investment is only possible because the City paid off other debt and restored its AAA bond rating.
Public safety
The 2013 budget as adopted includes Mayor Rybak’s recommendation to add $2.5 million to the Police Department budget, with the aim of having 10 more officers on the force by next summer.
Next year’s budget also incorporates Mayor Rybak’s recommendation to add $1.1 million to hire firefighters so that the Fire Department can prepare for expected retirements. This level of investment comes on top of a federal SAFER grant of $1.07 million received earlier this year.
Economic growth
The 2013 budget continues to invest in the Department of Community Planning and Economic Development, which has produced strong results in job growth and training, business growth and development, and promoting transit-oriented development.
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Published Dec. 12, 2012