It sounds like a riddle: how can a city raise taxes nearly 24 percent without collecting any more money?
St. Paul Mayor Chris Coleman proposed the whopping tax hike Tuesday as he delivered his final budget speech before leaving City Hall to run for governor.
The Star Tribune says the three-term mayor even admitted it was hard to speak the words. “Twenty-three point nine percent is a big number. It is difficult to stand before you and even propose it,” Coleman said.
But most of the hike he's proposing in the city's property tax levy can be explained by a single change.
A disappearing street fee is being converted to taxes
St. Paul has been charging homeowners and businesses a fee for the maintenance the city does in front of their buildings. Stuff like snow plowing, tree trimming, keeping the street lights working, fixing potholes and sidewalks.
The more curb space your property had, the higher your "right of way assessment" was. And this applied to all buildings, even nonprofits like churches, hospitals, and colleges that don't pay property taxes.
Last summer the Minnesota Supreme Court agreed with a downtown church that St. Paul's "assessment" was actually a tax and the city needed to get rid of it. So starting next year homeowners will not make right of way payments. Instead – under Coleman's plan, at least – they'll pay that money with their property taxes.
City officials emphasized the total they're collecting for street and sidewalk maintenance is staying the same. What individual property owner pays will change some in the transition from fees to taxes. Higher-valued businesses and office towers will pay more, the Pioneer Press says, while owners of lower-valued homes will actually pay less.
Those churches, schools, and other nonprofits are off the hook for now, although the city is looking at a possible payment-in-lieu-of-taxes it might charge them to help cover the services they get.
Total budget slightly smaller
Coleman's total proposed budget of $561 million is $1.5 million less than what the city is spending this year.
It includes six new police officers, including four who would be assigned to the department's new Mental Health Crisis Unit.
The budget also includes body worn cameras for cops. And based on a recent study Coleman is recommending a couple more paramedic units for the fire department.
The budget plan now goes to the city council for approval by the end of the year.