Hodges proposes 3.4 percent levy increase

Above: Hodges receives applause after delivering her 2016 budget address to the City Council at Minneapolis City Hall on Wednesday, August 12, 2015. (Leila Navidi)

Updated at 7:28 p.m.

By Erin Golden and Eric Roper

Minneapolis Mayor Betsy Hodges wants to add at least 20 new positions to handle crime data, muscle up the police presence downtown, oversee workers'-rights ordinances, inspect structures and aid with long-term planning.

The mayor's second budget proposal, outlined in a speech Wednesday, includes a 3.4 percent increase to the city's tax levy — the dollar amount collected in taxes — and new funding for programs related to Hodges' goal of improving racial equity in the city.

"Our work to grow our city and grow it well into the future is indistinguishable from our work to make sure life outcomes are not determined by ZIP code, race, or current class status," she said, noting that most of the growth in the city's population is among minority residents.

The levy change says little about the impact on individual homeowners, since it is divvied up based on fluctuating property values and the city's growing overall tax capacity. Hodges said that nearly two-thirds of residential taxpayers would see a property tax decrease under the proposal because of the city's growth.

The increase would bring the city's property tax collections to about $297 million, up from $287 million. Last year's increase was 2.1 percent, dropped from an initial proposal of 2.4 percent after a series of sometimes-heated City Council debates. Hodges' overall budget is about $1.2 billion, roughly the same size as this year's budget.

The biggest new investment proposed was $10 million to rehab the city's aging 10th Avenue Bridge, which will match $30 million that has been committed from the state.

Hodges also pledged to set aside $8.5 million to the city's affordable housing trust fund, lower than the $10.5 million ultimately committed in 2015. But she also pledged $1 million for affordable housing outside of that fund to help create three or more bedroom housing units for the poorest families -- units that typically don't qualify for the trust fund dollars.

The mayor said she wants to ensure police are spending more time on calls, walking their beats and developing relationships with the neighborhoods. Her budget would add two sworn officers focused on downtown, raising the police department's authorized sworn staff from 860 to 862 officers. She would also fund a recruit class and dedicate more than $435,000 to four new positions: two forensic scientists in the crime lab and two positions in the department's Crime Analysis Unit to help speed responses to information requests.

Two more new positions would be dedicated to redacting police body camera footage. In meetings earlier this summer, officials said the city has only two people to perform such work and is currently unprepared to handle the volume of requests likely to come with a full rollout of the program next year. Seattle, for example, has 35 full-time employees handling body camera footage.

Lt. Bob Kroll, head of the city's police union, said Hodges' plan is a step in the right direction but falls short of the department's needs. He said police have operated the last several years with far fewer officers than authorized in the budget, because of the number of new recruits in training or people retiring. Currently, he said, the city has closer to 800 officers on the street, even though the official number is 860.

Other investments include $580,000 for public art, which is sure to please art advocates who protested the lack of funding for the program in the 2015 budget. Following last year's budget process, the council voted to require a percentage of the city's bond debt for new public art projects and maintenance of existing pieces. Hodges also wants to provide $400,000 for a "pedestrian safety-oriented" redesign of Vineland Avenue, next to the Walker Art Center.

Sustainability efforts were another focus of the budget; Hodges set aside $400,000 to upgrade about 900 streetlights to LED technology. She said the move would save the city more than $113,000 each year.

Hodges said she was making $750,000 in "ongoing strategic cuts" to departments, but did not elaborate on the specifics. An official from the mayor's office said the reductions will not trigger layoffs or reductions in public offices or services.

A majority of the council attended the mayor's 45-minute address, though four members — Elizabeth Glidden, Lisa Goodman, Linea Palmisano and Blong Yang — were absent.

Beyond a statement of mayoral priorities, the annual City Hall budget address offers few details for outsiders to scrutinize. Actual spending amounts will not be public until later this year.

The proposed spending resonated with Council President Barb Johnson, however, typically the council's most conservative voice. "As I'm listening to the new spending, I think it's in places … that I'd like to see more investment," Johnson said, highlighting inspectors and the police department support staff.

Council Member Andrew Johnson said he expects most residents in his south Minneapolis ward won't see their property taxes go up next year. He noted that the city's tax system functions such that some homeowners will likely always see an increase while others see their taxes drop, regardless of levy changes.

"Even if it dropped by 5 percent, there would still be people who would see an increase," he said, adding that "for the average homeowner, this is a tax break."

Fact Box: The city's tax levy is a dollar amount divvied up between homes, apartments, commercial and industrial property.

The city's total tax capacity — the property value that is subject to taxation — grew by about 9.8 percent between 2014 and 2015, though slightly less than the previous year. Most of that growth is attributable to the booming apartment market, which is alleviating the burden of the levy on houses.

Those houses are still expected to comprise 50.6 percent of the tax capacity in 2016, but the apartment share of the pie has risen nearly 4 percent since 2014's taxes.

Tax Capacity
2014* 2015* % change
Residential $228 million $244 million 6.9%
Apartment $56 million $72 million 28.7%
Commercial $128 million $146 million 14.2%
Industrial $26 million $19 million -25.8%

* Assessments for subsequent tax year. Numbers rounded.