A tale of three cities

We at Center of the American Experiment have long warned of looming budget battles in Minneapolis and St. Paul. Those battles are now here, but the two sides are lining up rather differently on either side of the Mississippi.

St. Paul

In a report titled “St. Paul City Council passes property tax increase, makes cuts to mayor’s spending plan,” MPR News writes:

The St. Paul City Council approved a property tax levy increase of nearly 6 percent at its meeting Wednesday evening. Like municipalities and counties across Minnesota, the capital city is facing increased costs and turning to taxpayers to pay more.

The increase was less than Mayor Melvin Carter wanted. He said in a statement his administration “will determine next steps in the coming days.”

In August, Carter proposed a 7.9 percent increase in the property tax levy — the total amount that the city collects. For the owner of a home valued at $275,000, it would have meant another $133 in the city portion of their property tax bill.

Council members wanted to limit the increase to 5.9 percent, and Carter proposed meeting them halfway. Flanked by supporters from community and social service groups ahead of the Wednesday vote, the mayor urged the council to approve a 6.9 percent increase. He said the council’s plan would mean cuts for police overtime and other priorities while saving homeowners very little.

“Those two budgets aren’t that far apart. In fact, they amount to just about a $19 a year difference in terms of the tax impact on a median-value home,” Carter said. “But let me tell you, they amount to a whole lot in terms of the city services we experience in our community.”

Council members turned aside the measure supported by Carter, voting 5 to 1 to hold the levy hike to 5.9 percent. Among those supporting the lower increase was council member Anika Bowie.

“My constituents sent me here to this seat to be their voice and to ensure the people who voted for me requested the levy to go down,” Bowie said.

So, in the Saintly City, it is the Mayor who is pushing for higher taxes and the council who are trying to restrain him.

Minneapolis

Leaving Marshall Avenue for East Lake Street, what do we find in Minneapolis? In a report titled “Mayor Frey vetoes Minneapolis City Council’s 2025 budget,” KSTP writes:

The 2025 budget for the City of Minneapolis was headed to Mayor Jacob Frey’s desk on Wednesday, but he said he would veto a laundry list of amendments that add new spending.

…

Frey first proposed a property tax increase as high as 8.3%, which breaks down to around $214 per year for a home of median value. Frey said he would go as low as 6.4% if the City Council cut some of its nearly 80 amendments.

Council members, on Tuesday night, approved a record 71 amendments to the city’s general fund, bringing the original proposed tax levy increase down to 6.8% — which Frey said he would approve, but rejected the budget as a whole.

Less than an hour after members of the City Council’s progressive majority held a press conference on Wednesday afternoon touting its passage, Frey announced plans to veto the budget.

In short, the city council has been trying to ramp up spending while keeping property tax increases down. Mayor Frey has rightly said that this isn’t possible and nixed the budget. Kare 11 reports:

Mayor Frey said in a press release he was concerned with what he described as “fiscal irresponsibility,” saying the council’s proposed budget would add $6.53 million in new cash spending, “undermining the City’s financial health.” 

“The Council’s budget increases property taxes for years to come,” said Mayor Frey in a press release. “It cuts essentials like unsheltered homelessness response and recruitment of police, then turns around and uses the money to fund pet projects. Fiscally, times are tight—federal funding will likely be withheld and state dollars are in short supply. We need to be responsible with our tax dollars.” 

In the Mill City, it is the Mayor who is the voice of fiscal restraint and the council who are trying to have the taxpayer’s cake and eat it too.

Meanwhile, in Duluth…

If we head up I-35 to Duluth we find a different fiscal story. Northern News Now reports:

In September the Duluth City Council approved a flat levy increase for property taxes in the city for the first time since 2014.

Next week the Duluth City Council will vote on the official budget proposed by Mayor Roger Reinert.

There is a maximum of a 1.85% increase but the budget is considered flat because it will be paid entirely by new economic growth, and therefore won’t be passed on to homeowners.

Last year the city saw nearly a 2% increase in economic growth which will help cushion the budget.

…

A flat property tax increase is notable this year as other Minnesota cities are seeing significant increases. For example, Rochester residents could see an increase of nearly 10%, and in Minneapolis, people may pay up to 8.1% more in property taxes.

Reinert is pleased the city made no amendments to the budget and takes it as a sign of support from the council. He hopes the budget will pass unanimously at its last council meeting of the year.

What a difference 150 miles and a bit of economic growth makes.