Minneapolis Mayor Jacob Frey says the economic impact of COVID-19 continues to dramatically limit what the city can expect to spend next year.
"Fifty-five percent of our ongoing general fund revenue are garnered from sources outside of property taxes,” Frey said in a Friday address to outline budget priorities for 2021. “In a typical year we would expect those revenues to increase by about $3 million. Due to the recession caused by COVID-19, those revenue sources will decrease next year by $32.5 million."
In addition, Frey said the city will receive $3.7 million less in Local Government Aid.
Frey said these hits are landing as the city is still trying to recover from unrest that occurred in the wake of the killing of George Floyd.
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"Our businesses and residents are staring down more than half a billion dollars in damages — thousands more in lost wages and business losses,” said Frey. “I'll be relentless in seeking out and securing support from our private, philanthropic and foundational partners. But we simply can't afford to take our foot off the gas when it comes to securing support from the state and federal government. No city, including Minneapolis, can undertake this work alone."
In order to make up lost revenue, Frey said he’s proposing a 5.75 percent property tax levy. Frey said he wants to avoid staff cuts as much as possible. His staff is working on volunteer early retirement incentives to encourage more senior staff to step down.
Frey has faced public pressure to make deep cuts to the police department budget since Floyd was killed by a Minneapolis police officer. While he rejected the idea of abolishing the police department, Frey said the city-wide hiring freeze through the end of the year presents an opportunity to change police department culture.
"Dozens of cops have separated from employment this year and we expect that number will reach one hundred by year-end 2020,” Frey said. “Those hundred vacant positions will be included in our hiring freeze to realize savings for property tax payers. Now is the time to accelerate community recruitment efforts."
Frey’s budget calls for spending $2.5 million in new and ongoing funding for the Office of Violence Prevention, which he said will provide community leaders resources needed to intervene and prevent the spread of violence.
Frey said he hopes to have the final revisions to the Minneapolis budget in place by the end of the September.