City’s 2014 budget cuts property taxes, invests in future
The Minneapolis City Council unanimously passed a 2014 City budget that, among other things, provides a 1 percent cut to the property-tax levy. It’s the first such decrease in the levy in 30 years. It’s also the third City budget in a row in which nearly 70 percent of residential taxpayers will see a decrease, or no increase, in their property taxes. In 2014, 67 percent of Minneapolis taxpayers will see a decrease in their property taxes.
The 2014 budget also makes important future investments in:
- Responding to a “silver tsunami” of impending retirements by hiring and training a diverse new workforce for the City, especially in the Police and Fire Departments;
- Improving public infrastructure, including significant road, transit, bike and pedestrian improvements, and $4 million for preliminary engineering for the Nicollet–Central modern streetcar project;
- Greening the city to meet the challenges of climate change; and
- Growing jobs, housing and population in Minneapolis.
The ability to cut property taxes in 2014, while making investments in the future, is possible for three reasons:
- Earlier this year, Gov. Mark Dayton and the Legislature restored some of the decade-long cuts to local governments, providing Minneapolis with $12 million more in Local Government Aid.
- Also earlier this year, Mayor Rybak and the City Council created a Property Tax Relief Fund with money that the City saved in 2012.
- Thanks to the stadium legislation, revenue from sales and hospitality taxes that the City now controls and may use for economic development are growing twice as fast as estimated in a recovering economy.
These recent developments come on the heels of tough choices that City leaders have made over the past decade to restore the City’s fiscal health:
- Watching spending, with the City of Minneapolis spending 16 percent less in 2014 than in 2002, after adjusting for inflation;
- Paying down $350 million in debt;
- Reforming closed pensions that were draining taxpayers;
- Restructuring City government;
- Delivering $5 million annually in Target Center property-tax relief with the 2012 stadium deal.
Had leaders not made those tough choices, property taxes would be 35 percent higher than they are.
Published Dec 24, 2013