As cities watch their budgets erode with state aid cuts, declining property tax revenues and sagging permit fees, a small savior has emerged: the streetlight utility fee.
Streetlight fees? Some cities are switching them on
Some cities with budget woes are considering charging residents utility fees for streetlights. But others are rejecting the idea as a hidden tax on homeowners.
September 20, 2009 at 2:54AM
Communities from Richfield to South St. Paul and Forest Lake to St. Cloud are among the cities that have recently passed or are expected to pass streetlight fees. At least 20 others have considered such fees.
"It's really an indicator of how strapped cities are feeling with their budgets," said Anne Finn, a lobbyist with the League of Minnesota Cities. "They may not have looked at this before because it's probably not the most popular revenue-raising tool with residents. But they're feeling there aren't that many options left, and this is one thing they can do to pay for a service that residents need."
In Richfield, a city hammered by state aid cuts that total $2.48 million between 2008 and 2010, the City Council is expected to approve a streetlight fee on Tuesday. It would charge each residence between $20 and $24 per year to raise $317,000 to keep the city's streets brightly lit. The cost previously was paid from the city's general fund. But with a 2010 budget that is anticipated to be nearly 3 percent smaller than this year's, the city needs the money, said City Manager Steve Devich.
"This reflects the actual cost of electricity and maintaining the lights," he said. "A well-lit community is a safe community, and that's something this community has valued."
Levy limits that last until tax year 2012 cap property tax increases and state law limits what Minnesota cities can do to raise funds. But state law allows cities to use "service charges," including fees for garbage and recycling, sewer maintenance and use of city-owned recreational facilities. Among the lesser-known things cities can charge fees for are police escorts, copies of traffic accident reports and street lighting.
Use of the streetlight utility fee isn't a slam dunk even in cities that need the money. In many cities, discussion about whether to impose the fee has spurred discussions about equity. Are there lights that everyone should pay for? What if lights are on a dead-end street that no one except residents uses? What about schools on huge sites, or people who live on dark rural roads that are part of a well-lit city?
City councils in Minneapolis, Edina and St. Louis Park all discussed enacting a citywide streetlight fee and decided against adopting one this year. On Friday, the Minneapolis City Council did approve a fee for streetlights and routine street maintenance, but only for entities that don't pay property taxes.
In St. Louis Park, Mayor Jeff Jacobs said the City Council had concerns about fairness. "If we did a curb-and-gutter fee, or alley paving, you could calculate how much your property is benefitting," he said. "That's harder with light."
Jacobs said he felt a streetlight charge added to a long list of fees on a utility bill was a hidden way to raise taxes. "People get a little annoyed with nickel-and-dime stuff," he said. "If you're going to raise my taxes, be honest about it and look me in the eye and do it. It felt like a bit of a shell game, and we didn't want to do it."
But officials in cities that have been hit harder by state cuts and declining property values say that the alternative to the streetlight fee is cutting deeper into city services.
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