How St. Paul can find a way out of its budget problems – Twin Cities

In$ight St. Paul is a group of St. Paul residents who are deeply concerned about the city’s financial health. We cover the entire political spectrum, and regardless of your political leanings, finance matters to everyone. Without a solid financial foundation, it will be difficult for St. Paul to provide essential services such as public safety, fire protection, emergency response, road repair and maintenance, and recreational opportunities.

We were made aware of the city’s dire financial situation when the mayor requested a 1 percent sales tax increase to cover over $100 million in deferred park and recreation maintenance and the rehabilitation of several of the city’s major arteries. Frankly, we were amazed to learn that our city leaders had allowed our major cities’ assets to deteriorate over time to the point where it would have ended up costing all of us far more money than if we had properly taken care of those assets. Many of us voted to increase the sales tax but wondered how we got into this situation.

What made matters even more incomprehensible was that city officials had recently sought a $100 million-plus guarantee from the state legislature to build even more facilities, knowing full well that they would use what we already had. couldn’t maintain and operate. This makes no financial sense, let alone responsible use of city facilities.

Our group delved into the city’s financial condition and prepared a financial report using readily available data from the state legislature, the Metropolitan Council, the Minnesota Department of Revenue, the Ramsey County Taxation, the state demographer, and recent department budget presentations to the St. City Council from Paul.

Our financial report shows that St. Paul has the highest effective property tax rate of all 20 regions in Minnesota and also the highest sales tax. It also has the most tax-exempt real estate and tax increment financing (TIF) counties. Because these properties do not pay property taxes for city services, the cost of basic municipal services such as police, fire, emergency response, road maintenance and snow removal must be borne by all other homeowners, renters and businesses. St. Paul has 17% of its homeowners, more than double the state average, with a property tax burden of more than 5% of income, falling most heavily on lower-income people. This is a key figure used by the state legislature to determine tax burdens.

Despite this high tax burden on residents and businesses, the mayor’s proposed budget includes funding for many new parks. When we consider the city government’s actions to provide TIF for so many development projects, we believe the city is on an unsustainable path financially.

Fortunately, most of our city council members are new and can bring a fresh perspective to save our city from impending financial disaster.

First: roads

First, we recommend that the Mayor and City Council prioritize rebuilding the city’s arterial roads and sidewalks and maintaining existing parks, and immediately stop all funding for new park projects.

The proposed capital improvement budget includes $12 million for the planning and design of new facilities; Let’s delay this until we figure out how to pay, operate and maintain the staff. We have one of the highest rated park systems in the country. So let’s keep building new facilities until we can properly operate and maintain our existing ones.

Second: TIF transparency

Show us the data on TIF district performance and the amount of money that successful TIFs donate to unsuccessful ones.

The city’s website does not contain information about individual TIF districts or an assessment measure to determine whether each district is meeting performance expectations. Why doesn’t the city have this on their website to show us the data? Could it be that the city has overused the TIF, placing an unreasonable burden on all other taxpayers?

We need more transparency, new standards, and perhaps a higher bar for creating a TIF district.

Third: payments in lieu of taxes

Let’s implement voluntary payments in lieu of taxes on tax-exempt properties to ensure those properties pay their fair share of city services.

When the city, like many other cities, was no longer able to fund road maintenance services, many organizations were willing to support the services received from the city, but the mayor and city council did not pursue this option.

Find a good path forward

Our financial report is designed to educate and inform our city, state and county leaders and residents about St. Paul’s current financial situation.

The aim of our report is not to assign blame, but to find a sustainable path forward. We invite everyone to read and comment.

Unfortunately, after repeated requests to meet with the city’s budget officials, they declined to meet with us.

We invite others who feel the same way to get involved, contact your council member and join us.

Gary Todd is co-chair of In$ight St. Paul, chairman of Save Our Street and retired senior project manager from Thomson Reuters. Carl Michaud is a former assistant county administrator for public works in Hennepin County.

In$ight St. Paul ([email protected]) is a group of residents who have come together to call on our elected city officials to make the necessary budget changes to ensure a more financially affordable and stable, high-quality future create. high quality and responsive essential services.

Originally published: December 3, 2024 at 4:37 pm CST