2008 budget will require either increased sate aid or significantly higher taxes–and service cuts.
St. Paul Mayor Chris Coleman presented his 2008 budget proposal against a backdrop of uncertainty over the likelihood and scope of a special legislative session in the wake of the I-35W bridge collapse.
Coleman walked a fine line in his speech before a roomful of supporters and stakeholders on Tuesday. Although he reiterated his position that Gov. Tim Pawlenty should call a special session and reverse his tax-bill veto, which cost the city $10.2 million in local-government aid (LGA), the mayor warned that painful choices remain regardless of what happens – or doesn’t happen – at the Capitol.
“We who love this city must stand together today,” Coleman said. “We must stand together and reject the false choices that some would have us make. We must stand together and make the tough choices that will move our city forward.”
By “tough choices,” of course, the mayor means cutting services and raising property taxes.
Given current service levels, St. Paul faces a $17 million budget shortfall in 2008. Coleman outlined a pair of proposals to cover that gap, depending on what state lawmakers accomplish in the coming weeks.
If the governor and the Legislature restore the city’s LGA, Coleman will recommend Plan A: increasing the 2008 levy by $4.9 million and restructuring Parks and Recreation Department services to save additional funds. If the state fails to act, Coleman will recommend Plan B: increasing the levy by $10.2 million and making even steeper service cuts.
Both plans were short on specifics, but the mayor did propose turning over three rec centers the city now shares with the St. Paul Schools to the school district completely. He also said the city will seek out “partners” to assume control of other park spaces.
Freed from the responsibility of manning service centers, remaining parks and rec staff will target recreation services to the locations where they are most needed, Coleman said, dubbing the mobile staffers a parks and rec “Go-Team.”
“We will make significant and painful cuts, but we will provide better services to our customers when and where they need them the most,” Coleman said. “And that’s going to take a new approach and a new way of thinking.”
Meanwhile, Coleman pledged not to pursue budget cuts in other departments. He said the city will add 25 police officers in 2008. And he said the city’s libraries would save $300,000 next year through expansion of the self check-out system.
The mayor was not vague in his assessment of how the city ended up in the predicament it finds itself today.
As a result of strong economic growth locally and nationally, the city could rely upon annual increases in LGA throughout the mid- to late-1990s, and those increases, Coleman said, sheltered property taxpayers from municipal levy hikes.
But since 2003, LGA has become much less reliable. St. Paul’s allocation dropped by almost a third – from $76 million to $53 million – from 2003 to 2005.
“For 11 years, we didn’t increase the size of the levy,” Coleman said. “Our metro tax rating fell from second to 75th. However, that was not a sign of fiscal prudence. Rather, it was a sign of disinvestment, and our community is beginning to feel the consequences.”
Last spring, legislators passed a tax bill that would have bumped St. Paul’s LGA allocation to $67 million, but Pawlenty vetoed the bill because it included a provision that would have required the state to take inflation into account during budgeting.
“Along with mayors from across the state, I once again call on the governor to call the Legislature into special session to restore LGA,” Coleman said. “While the transportation needs of the state must be addressed, Minnesotans deserve property-tax relief, and they need it this year.”
Chris Cowen, a business agent for the American Federation of State, County and Municipal Employees who attended the budget address, joined Coleman in calling for a special session.
“We need the governor to lead and the state Legislature to get together and resolve the local-government aid, which I think is tied to an overall infrastructure decline statewide,” Cowen said.
The mayor’s “Plan B,” Cowen said, will not be easy for anyone to swallow – least of all city employees. “Option B includes many difficult and harsh choices that I don’t think anybody in St. Paul wants to make,” he said.
Michael Moore edits The Union Advocate, the official publication of the St. Paul Trades & Labor Assembly. E-mail him at email@example.com
PHOTO: Mayor Chris Coleman outlined the choices for St. Paul in his annual budget address.
Union Advocate photo