Minneapolis city officials said they will have to cut jobs, road paving projects and money set aside for property tax relief to make up for more than a $23 million reduction in state aid.
The cuts come additionally to the elimination of 80 full time jobs, including dozens of police and fire positions, that were called for in the city's existing budget.
The aid cut did not take city leaders by surprise. Last December, the city council passed a supplemental "state deficiency budget" that anticipated a reduction from the promised amount of $87.5 million this year to $64 million, the amount of aid the city received in 2010. The contingency budget includes a list of cuts and adjustments designed to make up for the gap in funding.
City Council President Barb Johnson said city staff will begin work on how cuts should be implemented.
"Department heads will have to look at where they are in their spending for the year and we'll have a report with each department about what their plans are to deal with the reductions that are a part of the council's action," Johnson said.
Cuts include $2.8 million for property tax relief and $6.2 million from the road paving program.
The police and fire departments have already sustained job cuts under the city's regular 2011 budget, eliminating 24 police positions and 32 firefighter positions. The departments may have to institute layoffs under the deficiency budget.
Under the deficiency budget, the fire department would lose a $1.1 million bridge payment. The payment is to tide the department over as it tries to drop 32 firefighter positions through attrition by the end of 2011.
However, Johnson not enough firefighters have retired or taken buyouts. Without the bridge money, the department will have to lay off firefighters.
Fire Chief Alex Jackson is out of the country, and assistant Fire Chief Cherie Penn declined to comment. Departments are working to eliminate positions without having to lay off employees, said a city budget official.
The Minneapolis police department received a $500,000 dollar bridge payment, but are ahead of schedule in attrition, Johnson said.
The city got a boost from the state legislature's special session when lawmakers passed a pension bill that will allow the city to avoid millions of dollars in pension payments starting next year. The bill, however, will not be enough for the city to make up for the loss of state aid.
The legislature also approved several requests by the city to help tornado victims in north Minneapolis, starting with $4 million in matching funds to FEMA. The match allows the city to be reimbursed for more than $16 million in damage to urban infrastructure.