Coleman threatens big tax hike for St. Paul

Mayor Chris Coleman
St. Paul Mayor Chris Coleman said he'll seek a 15-percent property tax increase if a special session of the Legislature doesn't dedicate more state money to cities.
MPR Photo/Marisa Helms

Coleman says his 2008 budget is based in honesty about what quality public service really costs, something that previous mayors Randy Kelly and Norm Coleman did not do. He says although city residents didn't see a tax increase for 11 years, it was not a sign of fiscal prudence. He says instead, it was a sign of disinvestment in the city and residents are now starting to feel the consequences in the form of higher taxes.

"We were lured by false choices, that we could somehow maintain our quality of life without having to pay for it," he said. "We figured out ways to cut service here and costs there. We pushed up fees. We put off replacing roofs and repairing tennis courts. At times, we were able to avoid layoffs, but only because our most experienced staff were retiring and were not being replaced."

Coleman says St. Paul now faces a $17 million deficit. The budget situation is made worse because the city has lost over $100 million in state aid over the past several years. And this year was no different. St. Paul was slated to receive an increase of $67 million in state aid for 2008. But Gov. Tim Pawlenty vetoed the tax bill in which the state aid was included.

Now, St. Paul is now expected to receive $10 million less from the state because of the veto.

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"Along with mayors from around the state, I once again call upon the governor to call the Legislature into special session to restore local government aid. While the transportation needs of of the state must be addressed, Minnesotans deserve property tax relief and they need it this year," Coleman said in his budget address.

Whether the state acts, St. Paul residents will see a tax increase; the question now is how large that hike will be? With more state aid, Coleman proposes a 7-percent increase. But without a restoration of aid, Coleman is calling for an increase of nearly 15 percent.

Similarly, in public safety, Coleman says restoration of state aid means the city can buy 125 new squad cars and hire 25 more police officers in 2008. Without state money, the city can hire only 13 officers and buy 100 new cars.

Regardless of state support, Mayor Coleman also announced the city budget can no longer to afford to staff all of its recreation centers in the city.

"In parks and recreation, we will make significant, and quite frankly, painful cuts," he said. "But we will provide better services to our customers when and where they need them the most. And that's going to take a new approach and a new way of thinking."

Coleman is proposing that the city no longer staff eight to 10 rec centers. Instead, he is proposing to shift the ownership and running of the centers to other partners that may include the St. Paul School District.

Libraries will not be closed and the total number of hours across the system will be maintained. Coleman says, however, that the city will make adjustments to the library budget to find about $300,000 a year.

St. Paul City Council President Kathy Lantry and her colleagues on the Council will spend the next several weeks going over the mayor's budget proposal. Lantry says her job is to try to keep the tax increase as low as possible while being able to maintain the quality of life people in St. Paul expect.

St. Paul Area Chamber of Commerce President Kristofer Johnson says he's concerned about the tax increase, but he appreciates Coleman's businesslike approach to finding efficiencies in the budget.

"We've got to be concerned about not only the tax increase, but also the proposed fees, and we haven't heard about those yet, the fee increases, what does that do to the environment businesses are operating in? And certainly we're always concerned when businesses struggle to make it," Johnson said.

As for Coleman's hopes to recover state aid, Governor Tim Pawlenty has said he would prefer that a possible special session focus on transportation in the wake of the 35W bridge collapse. But the governor's spokesman, Brian McClung says Pawlenty "is open to considering some limited additional consensus items if agreement can be reached in advance."