Mayor Rybak Proposes Sequence of Cuts if State Reneges on LGA Promise
State cuts would means more debt, more potholes in Minneapolis
September 16, 2010 (Minneapolis) As he promised in his August 16 budget address, Minneapolis Mayor R.T. Rybak today proposed a sequence of cuts to his 2011 recommended city budget to take effect if the State of Minnesota fails to deliver fully on its commitment of Local Government Aid (LGA) to Minneapolis next year.
The Mayor’s Plan A Current Law Budget that he proposed on August 16 assumes that the State of Minnesota will deliver fully on its commitment in current law of $87.5 million in LGA to Minneapolis in 2011. Mayor Rybak said then that Minneapolis residents should hold the State accountable to that promise, as should residents of all Minnesota cities.
In light of next year’s State budget deficit of $6 billion, however, Mayor Rybak requested in his August 16 budget address that the City Council simultaneously pass both his Plan A Current Law Budget and the Plan B State Deficiency Budget that he proposed today.
The $18 million in cuts that Mayor Rybak outlined today fall most heavily on street paving and paying down pension debt. Mayor Rybak proposed sequencing the cuts in the following order, depending on the magnitude of the cuts that the State might make to Minneapolis’ promised LGA next year:
1) Cut $6.1 million by delaying payment on pension debt;
2) Cut $4 million in preventive street maintenance, street resurfacing and alley resurfacing;
3) Cut $0.72 million in innovative, cost-saving initiatives (see below);
4) Cut $1.4 million more by delaying payment on pension debt;
5) Cut $5 million more in street and alley maintenance and resurfacing;
6) Cut $0.7 million in the Fire Department.
"I would prefer not to make these cuts," Mayor Rybak said. "I wish I could propose only one budget a year, but because of ongoing uncertainty about the State’s budget, we will need to adopt this two-tiered approach to budgeting now — and it’s likely that we will have to continue to making adjustments throughout the year.
"We must hold the State accountable to following current law and following through on its commitment to Minneapolis, but we must also spell out ahead of time what cuts we will make if it does not."
Mayor Rybak added, "Adopting a two-tiered budget in December will give the City Finance Director specific directions about what should be cut, in what order — with the cuts triggered early next year by the amount of LGA that the new Governor proposes in his budget to the new Legislature."
The cuts that Mayor Rybak proposed if the State cuts its 2011 LGA commitment to Minneapolis have the following consequences:
Cuts to street maintenance ($9 million total) will mean that extended over five years, 300 miles of City streets will not receive basic preventative maintenance, 66 miles of streets will not be resurfaced and eight miles of the worst alleys will not be resurfaced. (Mayor Rybak outlined these consequences in a September 2 presentation to the City Council’s Transportation and Public Works Committee.)
• Delaying payment on pension debt ($7.5 million total) will mean that in subsequent years, it will be harder for the City to keep police and firefighters on the job and will make property-tax increases more likely.
• Cuts to innovative cost-saving initiatives include eliminating funds for regional collaborative transportation planning for Public Works and for voice-recognition software for 311.
• Cuts to the Fire Department will mean layoffs of eight firefighters.
Should this sequence of cuts still not be enough to fill the gap created by State LGA cuts, Mayor Rybak said he would consider an increase of one more percentage point in the property-tax levy. That increase would raise roughly $2.6 million.
"I’m proud that every budget that I have delivered and the City Council has passed has matched revenue to spending five years out, not just one year at a time. And I’m proud that even in the midst of the worst recession in decades, we have carefully managed our costs and paid down $130 million in debt. Our record of fiscal management is strong," Mayor Rybak said.
Cutting important City services when the State fails to deliver on promised LGA "is not new," Mayor Rybak continued; "we’ve already done it for the last three years in a row. This year, we’re just planning even further ahead: we’re simply proposing it months in advance, in December rather than in April. We’re also making it easier for our employees to plan their work and for our residents to know what services they can expect from the City.
"As we know from years of experience in making mid-year cuts," he added, "the sooner we make them, the less difficult it is to absorb them."
Published Sep. 16, 2010