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Coleman's final St. Paul budget cuts fees, hikes property taxes

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St. Paul Mayor Chris Coleman delivers his 2018 budget address Tuesday.
St. Paul Mayor Chris Coleman delivers his 2018 budget address Tuesday morning at St. Paul College.
Peter Cox | MPR News

Updated: 4:38 p.m. | Posted: 2:34 p.m.

St. Paul Mayor Chris Coleman is proposing a shift in city funding that will result in a major property tax increase.

Because of a Minnesota Supreme Court decision last summer, the city eliminated its "right of way" maintenance assessment, which covers services including snow plowing, tree trimming and pothole filling. Coleman's plan would move two-thirds of those fees, about $20 million, to the city's general fund.

With that shift, the 2018 property tax levy — the total amount collected — will rise by 23.9 percent.

Homeowners would see the impact in different ways.

"For some, it will balance out," said Coleman, who is seeking the DFL nomination for governor in 2018

"The average homeowner will pay an additional $12 for services through this system," Coleman said. "Property owners who have higher value homes will have an increase in taxes that exceed the decrease in fees. Those who own homes below the median value will see a reduction in the total charges under my proposal."

City Councilman Dan Bostrom attended Coleman's budget speech. He hadn't seen the full budget and wondered how it will play out for property owners.

"The talk of a 25 percent increase is, astounding," he said. "If you save a million dollars from the right a way, as a taxpayer, and then you get another million dollars put on your property tax, that's a wash. However, if it's a million dollars here but your property taxes have to go up a million and a half. That's another story. It's waiting to see exactly what that difference is."

The street maintenance shift accounts for 19 percent of the property tax levy increase, and inflationary pressures on the city budget account for the other 4.9 percent, according to Coleman's office.

Coleman also proposed adding six officers to the St. Paul Police Department, four of whom will be specially trained and join a new Mental Health Crisis unit within the department.

Chief Todd Axtell was pleased with the proposal.

"Having the added resources to address some of those unmet needs," he said. "It also provides us an opportunity to teach other officers some of the best protocol — if you will — so that we can reduce unnecessary incidents where force may be used in the past, where we can reduce some of those situations through better understanding and better training."

In presenting the outline of his final budget in a speech at St. Paul College, Coleman noted his total proposed budget is $1.5 million less than the 2017 adopted budget.  

"I am committed to structurally balanced budgets," he said. "Today's costs will be met with today's resources. No gimmicks. No hiding the ball. No passing the buck."

Coleman's plan also includes new funding for paramedics, business development, the fight against emerald ash borers and early literacy programs in city libraries. 

The City Council would need to approve the budget proposal.

Correction (Aug. 16, 2017): Coleman's plan would shift two-thirds of right of way fees to the general fund, about $20 million. An earlier version of this story indicated his plan would shift about $30 million.