Continuing from my previous post which took a look at the '05 budget (not knowing the '06 was about to be revealed).
So...Budget Good Tidings? Sure if you don't pay property taxes in Mpls. The facts show us that the recommended budget is up ~ 30mm. Approximately 20mm of that is for retirement benefits listed under personnel; for which we are just going to issue more debt. Benefits growth is now expected to be 21% versus 19% last year. If anyone else out there is also familiar with normal growth rates for various demographic, investment and economic factors then this should make you gasp. It's only a matter of time before there is a lawsuit that seeks to mitigate this increasing cost. I don't know anyone in the private sector enjoying such benefits. Additional points of interest: 1. Don't be so happy about the increase in police funding. 2/3 of the increase in the police budget is just a reclassification of traffic control into police budget; actual increase is less than 5mm from a total of 115mm 2. In the midst of issuing 30mm new bonds to balance the budget just for city employee retirement bennies, the Mayor still wants to increase the community development budget; meaning increase the amount of money given away to "plan" the cityscape as they see fit. Community Development has grown to become the largest single line item in the budget. Community Development is as large as Police and Fire combined! All this just so a group of private-sector-wannabes can feel important by controlling who gets the Minneapolis equivalent of "Marvin Garden's" and control whether "houses or motels" are built there. Make no mistake, the Community Development budget is a set-aside for "friends of the council" or projects that the City Council/Mayor deem "appropriate." That does not mean the are all bad. I simply maintain the city should not be in this business. In fact, it's not a business. It's a charity. Pragmatically, it could be argued that it is the largest wealth transfer in recent budget history. For example, the many projects are mid to lower-income high-density housing projects for which current home owners are essentially being taxed to fund. Many would argue, myself included in fact, that municipal leaders should indeed play a role in the planning of incremental development to avoid projects that simply do not fit the landscape. However, that does not mean the leaders in question should also take over the role of developer; especially when they also control the spending process. I have never been so concerned. Maybe it took actually owning property to make me interested. Regardless, I hope others will see that the factual data does not paint a pretty picture in the 2007 - 2010 period. It's as if the multitude of city-fund committees that make up the entire Mpls budget all expect someone else is "really" minding the store and the "machine" does not realize how much we (Minneapolis residents) are being taxed, assessed & charged. Jason S. Harrison My previous post regarding the 2005 Mpls Budget. ======================================================================== === Solid fiscal principles? I'm obviously a newcomer to understanding how we pay for the city's spending party (and promised future spending) and what we spend it on. In the interest of simply knowing more about the City's budget, I took a look at the '05 budget and broadly reviewed 10 year spending & revenue patterns from data in the annual CAFR reports. For your own comparison, just copy the figures (space-tab delimited) into your own spreadsheet and view them yourself. ********************************************************* Revenue Source Fiscal-Year Taxes Fees&Permits Inter-Gov't-Revenues Charges&Servicews Fines&Forfeits SpecialAssessments Total 1995 99,722 11,350 152,254 28,293 6,549 45,836 344,004 1996 157,902 12,364 146,447 27,995 7,077 43,819 395,604 1997 169,362 14,103 172,158 29,938 6,959 34,890 427,410 1998 173,631 15,619 167,827 30,224 7,443 41,210 435,954 1999 181,839 17,068 170,824 35,649 7,862 37,374 450,616 2000 195,225 19,429 174,634 35,122 8,555 45,632 478,597 2001 236,098 21,110 166,576 37,442 8,663 61,227 531,116 2002 225,127 21,395 269,293 34,602 7,748 49,218 607,383 2003 248,584 22,915 164,600 34,192 8,704 56,979 535,974 2004 265,672 24,780 161,820 43,798 9,641 49,274 554,985 Spending Category Fiscal-Year General-Gov't Public-Safety Highways&Streets Culture&Recreation Health&Welfare Community-Development Capital-Improv. Debt-Service Total 1994 52,304 124,028 33,513 12,881 4,602 104,556 78,423 410,307 1995 47,607 126,599 33,253 13,852 6,779 156,284 163,873 548,247 1996 52,274 127,881 34,446 10,054 17,980 122,972 138,310 503,917 1997 52,717 143,083 35,743 8,081 21,524 120,573 67,617 449,338 1998 46,206 143,795 37,457 18,069 17,821 115,867 106,877 486,092 1999 48,545 142,025 39,495 19,246 19,484 162,780 108,249 539,824 2000 52,080 149,634 35,846 20,718 21,692 202,527 97,997 580,494 2001 56,061 153,530 38,820 22,359 122,619 154,616 137,282 685,287 2002 56,488 164,060 35,904 24,051 109,579 67,169 210,077 667,328 2003 98,201 160,750 33,542 26,346 22,856 110,576 59,714 119,592 631,577 2004 57,557 190,638 36,761 53,256 9,403 106,348 63,365 133,637 650,965 *********************************************************** I think some broad qualitative observations may be made when you look at the numbers as a percent of each annual total. 1. Since 2000 the city has started allocating significantly more to community development. You should know that translates to giving money to likely-already-well-heeled investors that want to develop local property. That's great but why are we subsidizing it like it's a city-council playground. The city should not be in this business if they can't spread the burden; especially at the bottom of a historically low rate cycle. If a project can't get funded at these rates...it's either a bad project, a sociology experiment, helping some business friends or an attempt at some personal legacy. 2. This development funding has come at the expense of capital improvements & putting cash in the bank to pay for previous retirement benefit promises made. They don't worry about this one cause "we can always tax ya!" (no I'm not a benficiary) 3. The blip in culture is the Library funding so I'm not concerned..we'll see later when spending normalizes. Other possible issues after digging deeper 1. Over the same 10 year period the mix of Mpls property value has gone from 70% residential to 80% residential and they project it to move even higher. Even more strange, supplemental to that data indicates just under a 1/3 of that total is non-taxable. That's more than the 20% left for commercial. But, the top 10 property tax payers (all commercial) pay ~1/4 of the property tax. So what's non-taxable? All the development we have been giving away? I don't know but I think that's a big portion. 2. When you look at the supplemental data the residential property value increase for '05 is ~15% but only a 11-13% increase in taxes. However, when you look at the tax-weighted average increase for property taxes on commercial buildings we see approx -2.0% in '05. More peculiar was the higher valued commercial property in the report did not even see an increase in valuation! Apartments received the same effective treatment. 3. One of the biggest expense issues the city has is the large and growing retirement benefits (assumed to grow 19% from their own data) that have been negotiated by any and all labor unions over the years...the same type of payments that are bankrupting the autos and airlines. 4. The convoluted fund structure allows funds that are supposed to be self-funding, to appear so with transfers from other accounts. The fund that makes up all the differences is the general fund i.e. the property tax base. 5. When presenting analysis that shows the tax base is just fine to continue issuing debt, the report uses the net-tax-capacity. However, we all know that this is not the number used to calculate our taxes, due to the 2001 reform of 8% max. So really, the "taxability" number is worse because we created a rule that does not let us use the net-tax-capacity to generate funds in the first place. 6. Various paragraphs warn that residential property taxation is expected to see much larger increases after the 2007 period expires and allows for such increases. However, when viewing projected budgets in later sections, only an 8% increase (current limit) in listed through years past 2007. Do they just not want to illustrate how bad it is going to get? REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact 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 Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
