This Budget Has Everything but Accountability

By 2025, the City of Minneapolis will have increased taxes by 27% since 2022. By 2026, that figure will jump to 39%, adding $120 million more than was collected in 2022.

Photo by Alexander Grey on Unsplash

Better Minneapolis doesn’t have an accounting degree and has never created a $1.9 billion city budget. However, we have managed multi-million-dollar budgets, and we’ve learned that you can’t afford everything you want. You may want to give excellent employees a 10% raise, but if the budget isn’t there, you settle for 5%. You may defer hiring or lower a job's pay grade to fit it into your budget. Worthwhile new projects may have to be rescheduled. There are no blank checks. When revenue falls, you cut costs to be stronger in the following years.

The 2025 Minneapolis City Budget proposed by Mayor Frey would raise spending by 2.86% over 2024. That’s the wrong direction. To fund increases, the city has proposed an 8.1% property tax hike in 2025, with an additional 9.8% in 2026.

We love Minneapolis and are grateful for its parks, schools, restaurants, amenities, and what, until recently, felt like stability. We plan to stay, but the city isn’t making it easy. In addition to rising costs for home insurance, car insurance, health care, senior care, education, groceries and energy, we’re now being asked to pay an additional 18% in property taxes in the next two years. And those are the obvious taxes, they do not include fees like road paving or ADA corner upgrades.

This newsletter will break down the proposed 2025 budget over multiple editions—it’s too much for a single issue. It’s important to understand that property tax increases affect everyone, including renters, who will face higher rents as a result.

Today, we’re examining a few items from the current budget that warrant closer scrutiny—ones we hope the city council and mayor will review multiple times. One problem with the current system is that the city administration has little motivation to cut spending. Each budget line item funds a different priority, and the people behind those priorities will turn out to vote for them in the next election. But with falling commercial tax revenue, it’s time the city made the tough decisions required to decrease spending. We recommend a 3% reduction across all departments. Such cuts would provide political cover, as every department could tell its constituents the reduction was mandated.

The City Pays Well

These screens shots are from the 2024 budget additions status update. To be clear, the money allocated can cover more than salaries, but the amounts raise questions that weren’t fully addressed in the August 12 Budget Committee meeting.

We aren’t sure how much the Greater MSP membership dues are, but this 1 Full-time Employee (FTE) will live well on their salary.

Roughly 1/3 of the budget is for personnel.

Much of this overtime expense is due to MPD staffing shortages.

This detail stood out to us. The line item includes software costs, but it's unclear how much of the budget is allocated to a single Data Scientist for the MPD.

These figures make us wonder if pursuing English and Art degrees in college were wise choices. Becoming a Data Scientist would certainly have been more lucrative.

Roof Depot

Whether it is traffic calming, bike lanes, Vibrant Downtown Storefronts and Cultural Districts or police technology, strong city leadership is needed to stand up to vocal advocates. The Roof Depot is one example. Currently, the city is paying $264,000 per month to keep this facility empty. The East Phillips Neighborhood Institute (EPNI) has received multiple extensions to buy the building for an indoor urban farm. While that may sound enticing, it doesn’t make financial sense. Additionally, the city’s funding maneuvers to keep this facility available are likely illegal. A city resident requested the State Auditor examine the project.  The issue involves the use of the city’s Water Fund to purchase the property in 2016. Regulations require the property to be used for waterworks projects, but instead, the city has spent approximately $24 million in carrying costs with no discernible benefit to residents. Senior citizens and those on limited incomes are being taxed to placate advocacy groups capable of flooding the city with emails of discontent.

In Conclusion

It’s unwise for the city to raise property taxes by 27% without first containing spending. When the city agrees to spend $17 million to build and staff the Southside Community Safety Center, it raises concerns. How did the cost get so high? Are other projects similarly inflated?

One of the primary responsibilities of our 13-member city council and the mayor is to practice good financial stewardship. This current budget proposal fails to indicate that is on the horizon. City finances are not a slush fund for gaining supporters. Priorities must be set because to fund everything is burdening residents unnecessarily. Unfortunately, we don’t have a citizen’s audit committee to go through the budget line by line to assess needs versus wants, so we must rely on our elected officials to do this painstaking work. Ballooning budgets dependent on property taxes will weaken the city in the long run. They hurt seniors and those with limited incomes the most. Those with the means to move may leave the city. We urge our representatives to be resourceful and recognize the days of being all things to all people must end.