2008 Minneapolis budget offers a tax hike and public safety emphasis

It's hard to have a serious discussion about property taxes and city services around a two-year-old boy who's just put on a new pair of slippers. Julie Horns is trying to talk over her son Edison and explain what an increase in property taxes might mean for the family.

Horns and her husband Dan Peters live in the Prospect Park neighborhood in Minneapolis. Julie is an analyst for U.S. Bank. Dan stays at home during the week to care for their son Edison and their one-year-old daughter Vivian. He sells real estate on nights and weekends, and with the slow real estate market, that means they're a one income household lately.

When we're still struggling to afford the house payment for the house that we've gotten into by the skin of our teeth. Each 50 bucks a month makes a big difference.

Their home is valued at $365,000. They're currently paying more than $4,900 a year in property taxes. That includes taxes levied by the city, county and the school district.

Horns says while for the most part they are getting a fair return for the money, any increase in property taxes will hurt.

"Well I feel that we're getting more of our money's worth now that we're going to have kids school age...we're supporting the schools," she says. "But when we're still struggling to afford the house payment for the house that we've gotten into by the skin of our teeth. Each 50 bucks a month makes a big difference."

Mayor R.T. Rybak and other city leaders say cuts in state aid have forced them to raise property taxes to pay for essential city services like police and fire. And they are particularly disappointed that in the 2007 session, Gov. Pawlenty vetoed a tax bill that would have restored $13 million in state aid to the city.

Dan Peters says that's disproportionately affecting city residents of modest means.

"I think that the head of the state government has been continuing to shift the tax burden on to the middle class and lightening the load, or refusing to force those that are on the higher end of the income bracket, to pay their fare freight," he says.

But others say the city can't blame the governor for its woes.

One of them, is David de Grio, who lives in the Windom Park neighborhood in northeast Minneapolis. He pays less than half the property taxes paid by Dan and Julie. He's more critical of the how the city has managed its finances. In particular, he's concerned that the city will fall short of reaching the hiring goal for police officers proposed last year by Mayor R.T. Rybak.

"In 2006 he says he's going to budget money to have 893 cops," says De Grio. "And come the end of 2007, we're -- depending on how you do the math -- between 43 and 60 short."

De Grio is part of a group of people calling for 50 more cops to be hired in the city. He says there's been a decrease in police presence in his neighborhood and an increase in petty crime. DeGrio says not long ago he had a book bag stolen from his driveway.

"If you're somebody who's out walking the streets looking for a house to break into, or a car to break into - if there's a cop car rolling through the neighborhood every hour, half hour, you're less likely to do that because there's a greater chance of you getting caught," he says.

Earlier this year the police department announced that it would delay the hiring of 20 officers until 2008 because of budget overruns. Currently the department is on pace to exceed its 2006 budget by more than $5 million.

Under the proposed budget, the city would hire 18 more police officers and four more 911 operators. Rybak also wants to spend $700,000 to help prevent mortgage foreclosures. And the mayor is proposing to double the amount of money the city spends on bridge repair. Rybak says the city will have to raise property taxes by 8 percent in order to help pay for these increases.

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