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Tax vote leaves Mayor Coleman with a dilemma

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St. Paul Mayor Chris Coleman
St. Paul Mayor Chris Coleman delivers his State of the City last year.
Peter Cox | MPR News file

The St. Paul City Council has backed down from a nearly 9 percent property tax increase they proposed last week, but still ratcheted up Mayor Chris Coleman's proposal of a 7 percent levy increase.

In a 4-3 vote, the council approved a maximum 7.94 percent increase in the levy. Taxpayers are likely to see varying increases, due to the way the levy is spread across residential, and commercial and industrial property owners in the city.

It's a maximum figure, required by law, and still gives city officials a chance to squeeze the budget down before the end of the year.

Council president Russ Stark said the new revenue target will mean cuts in proposed firefighter hires and other spending the council envisioned with its 8.6 percent hike, which succumbed to the mayor's veto pen last week.

The vote leaves Coleman with a dilemma. The council's ceiling is higher than he wants, but there's not enough time for another vote before the legal deadline to set the maximum tax levy.

If Coleman vetos the new target, the city has $5 million less to spend than even he proposed. And the council's new target is only $1 million more than his.

The mayor wanted $111 million levy for 2017. The council approved about $112 million. The total levy will actually be higher, including a nearly $2 million St. Paul Port Authority levy.

Tonya Tennessen, Coleman's spokesperson, said that he won't veto the extra taxes. "Vetoing this means vetoing his budget proposal, and he feels that would be disastrous."

She said Coleman would call on the council to work harder to have the city live within the means he set out in August. A final levy is to be set Dec. 14.

City officials agree on one thing: The lion's share of the increase is filling a $3 million hole left when Gov. Mark Dayton vetoed a tax bill with state aid for cities in May. Despite months of pleas to convene again in St. Paul, lawmakers haven't been able to strike a deal on a special session.

Council members Chris Tolbert, Dai Thao and Dan Bostrom argued against the new levy target saying the extra taxes were adding like adding insult to injury for their constituents.

"That's a pretty substantial addition for property taxes across the city. I still believe we should be ways to go below the [mayor's proposed levy hike of] 6.94 percent," Tolbert said."I think its going to be a negative effect on the people in our city."

"I think even 6.9 percent is awfully steep," Bostrom said. "It appears as though it's just extra money just being put in the budget ... As far as I can tell there's nothing that's defined for this to pay for."

But council member Amy Brendmoen said she didn't think it would be an onerous burden for a typical taxpayer.

"It amounts to less than $50 annually," said Brendmoen.

Council member Jane Prince said the recreation centers in her ward offered only six hours of programming on summer weekends — not enough to keep kids occupied, particularly kids in poverty. "This is the only way that I can keep hope alive for kids in my neighborhood," she said.

"I think this is a cordial agreement among us, frankly. I think we have some unmet needs in the city," said council president Russ Stark, who joined Prince, Brendmoen, and council member Rebecca Noecker in voting for the additional increase.

Correction (Sept. 29, 2016): Rebecca Noecker's name was misspelled in an earlier version of this story.