MJ writes: > But I was really, truly stunned at how bad Minneapolis city government can > be. I'm still surprised on a regular basis as I learn more about how this city > has spent itself into virtual bankruptcy--and how they constantly blame the > state, the feds, and anyone at hand in order to pass the buck.
MJ, there's been a lot of attention on the city's difficulties lately, but they mask the fundamental reality. Three things to note amid the bad news: 1. The city retains a triple-A rating, the highest investment grade. The bond houses don't give that to bankrupt cities. 2. The city is a NET PAYER into the region's fiscal disparities pool. That's where cities with healthy tax bases support cities whose tax bases aren't growing very fast. (St. Paul, by the way, is THE SINGLE HUGE recipient of fiscal disparities money.) 3. City residents and businesses pay more to the state than they get back in spending. (See: http://www.swjournal.com/articles/2003/04/17/news/export5777.txt - the data is a year old but I'm confident our support from the state hasn't gone up <grin>.) The city obviously has huge challenges. Here are the ones I believe Minneapolis made: 1. Our internal services fund deficit. Basically, money that previous administrations put on the credit card. The current council deserves praise for paying this off - it's responsible for about half your city tax increase. 2. Pension problems. This is a problem THREE generations in the making, as the story I posted last week indicates. Previous administrations have foolishly allowed an unacceptable taxpayer risk-reward ratio: pensioners benefit during short-lived stock market gains, but taxpayers are on the hook for losses. Again, the current administration is working to change this - and the fault also belongs to DFL legislators who fear labor's retribution. Still, even though I disagree with Phyllis Kahn on some of the details, I do think there are mechanisms to work through the current tough times - which seem especially acute because of the 2001-03 stock market drop, which may be working itself out. Certainly, the bond houses that rate our debt have known about the pension problems, and have figured that into their ratings. (I should also mention the teacher's fund problem is not as bad for city taxpayers, but that will come out when the Journal does its story.) Long-term pension debt absolutely stinks - and city leaders deserve their share of the blame. But no one in the financial community has said this will turn Minneapolis into Detroit. 3. Foolish tax-increment deals. Again, something not done by the current crop of leaders, unless you want to argue over the Sears complex. Many of these so-called TIF districts feed NRP - which, by the way, is not just the city's creation...it was created by the city, county, schools, parks and the state legislature. If anyone wants to undo it, they can - but even Republican Tax Chair Phil Krinkie says he doesn't want to. And whatever you think of NRP, it will release its hold on TIF dollars in 2009 - and a big chunk of change will flow back to the city budget that year. That's one reason the long-term is not as bad as what we're experiencing now. So in short, the city was dumb to spend too recklessly in the go-go '90s, but that was a full administration ago and the current crop has made rational five-year projections to plan through the current difficulties. (Unlike the state, they acknowledge and plan for cost inflation.) The Strib mentioned that property taxes would have to triple by 2010 to provide current services - by the way, not a fait accompli. Services are already being pared, for example. I think with the NRP money kicking back there's little change of such a tripling. But with these and other sins, you can't let the state off the hook. Local government aid - meant to compensate cities who deal with populations and problems the rest of the state chooses to shun - has been slashed more than 30 percent in the last couple years. The state agreed to pick up more of local education spending statewide - then froze per-pupil aid for three years despite costlier heat and health care - problems not of Minneapolis's making - and actually cut per-pupil aid for immigrant learners. Tax "reform" did make homeowners pay a bigger share and owners of low-value homes pay the "most more" - at the same time an office-occupancy drop (nation- and region-wide, also not of Minneapolis's making) lowered commercial property values and taxes more. So while it's wrong to let the city off the hook, it's equally wrong to let others off the hook, too. I think four years ago, the more civically aware people woke up to a couple decades of fiscal laziness and punished many city incumbents. I think what's happened since then is very different - a group trying earnestly to remedy past misdeeds while combating a post-9/11 economy and higher levels of governments that find the easiest budget gimmick is to force problems downward. I know you're in Jordan and I know they've withstood the worst of the crime problems for years, and especially this year. I don't trust the more cops = less crime equation, but it's a major challenge the current leadership must figure out how to meet. That said, I think there's plenty of good here, I believe in this place and its people and (on good days) its leaders - but mostly I believe that the people, armed with accurate information (not Pollyanna, or the eerily grim glee of the doomsayers) can work together to get through this. This is one of the best places I've ever lived for people working together - and even the sparks-flying way some might "work it out" on the list is, to me, mostly a sign of hope. I wallow in this stuff all day long for work, and believe me, I would move NOW if I thought bankruptcy, moral or financial, was the order of the day. It's not. The problems are tough, but Minneapolis remains one of the finest, most vibrant cities in the U.S. - in many ways, getting finer and more vibrant - which is important to remember, too. David Brauer Kingfield REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
