Wensday, November 24, 2010
Newsletter from www.taxpayersleague.org
Minneapolis Increases City Taxes 20%; Taxpayers File Lawsuit
Many Minnesotans received their tax statements in the mail this week and roughly 67% of Minneapolis homeowners will see a 10-20% increase of their city taxes. This is not to fund schools, safe roads or to protect the underprivileged; this tax increase is a result of pensions promised by the city years ago. I wonder if the home owners knew when they signed their mortgage they were agreeing to pay $20 million in pensions this year and $51 million in pensions by 2012. There has been a class action lawsuit filed against the City, which will not be resolved before the City vote to increase the tax levy on December 13th.
Find out why property taxes skyrocket while home values continue to plummet here
Monday, November 22, 2010
Post from freedomfoundationofminnesota.com
Minneapolis homeowners face double-digit property tax hike
Minneapolis residents turned out in droves last week to a city council meeting to discuss the city’s skyrocketing property taxes. Many had just received notice that their property taxes were set to increase by 15-20% in 2011. MinnPost reported that “for two hours one homeowner after another – from the disgusted to despondent – stepped to the podium to ask the city to reduce the increases; to issue a moratorium on new projects; and as one senior in a Teamsters cap put it, to ‘Stop it! Please! Stop it!’”
In fact, two-thirds of Minneapolis homeowners will likely see a 10-20% property tax hike next year. And they are demanding an explanation. The city is quick to blame two things for its budget mess: bad investments made by managers of the city’s “closed” pension funds and declining Local Government Aid (LGA).
And while LGA and closed pension plan obligations have unquestionably had an impact on the city’s finances, they also serve as convenient excuses that obscure the depth of the city’s fiscal woes.
Here are a just a few items the city isn’t as anxious to discuss:
- Pension obligations for current employees– The City of Minneapolis will spend $28.2 million in 2011 to the Public Employee Retirement Association (PERA), the plan, which covers most current city employees. That’s $2.2 million higher than this year’s obligation. Here’s a look at the annual increases to the city’s PERA obligations.
- City wireless internet services– Often mischaracterized as a “free” citywide wireless network, Minneapolis taxpayers areobligated to pay $1.25 million to US Internet for wireless services in 2011 (and many more years to come). And if past experience is any indication, much of that money will pay for a service that isn’t used. According to the Star Tribune, “in 2010 the city will use less than half of the $1.25 million a year worth of services it is paying for.”
- Taxpayer-funded lobbying– The City of Minneapolis has spent millions of dollars on taxpayer-funded lobbying in both St. Paul and Washington, DC. Last year alone, Minneapolis spent at least $630,000 to lobby state and federal policymakers.
Unfortunately, the tax picture doesn’t appear likely to improve anytime soon. According to Mayor R.T. Rybak’s five-year direction
, the Mayor recommends tax increases of 6.5% in 2011, 6.7% in 2012, 6.0% in 2013-2014, 5.5% in 2015 and 5% in 2016.” In other words, there’s a lot more pain ahead for Minneapolis taxpayers.
Dakota County leads by example
Dakota County prides itself on running a lean yet effective ship, and their 2011 budget proposal is no different. Despite facing tens of millions in lost state and federal revenue, most Dakota County residents will likely see their taxes remain steady
or even drop slightly, due to the county’s prudent budgeting and willingness to cut non-essential programs. According to the county website
, "property owners won’t pay for local government’s budget crisis—at least when it comes to the County’s share of property taxes."
In order to keep tax rates down, the county maintains a lean staff, and salaries and wages for 2011 will be reduced by 3%, dipping back down toward 2008 levels. In addition to efficient staffing policies, the county uses foresight when planning for the operational costs of future projects. For example, the county began allocating funds for a new library in 2005, even though its doors weren’t set to open until 2009. Thanks to this careful planning, there was no need to increase the allocation for library operations in the 2009 County Budget.
And finally, after conducting a cost/benefit analysis of scores of county programs, Dakota County leaders have identified and discontinued non-essential or underperforming programs, including the Master Gardeners program and bookmobile. (The Freedom Foundation recently took a look at the inefficiency and high cost
of bookmobiles around the state.)
As local governments throughout Minnesota search for ways to deliver essential services while sparing taxpayers, they should follow the lead of Dakota County.
Friday, November 19, 2010