Truth matters, even in politics.
To much fanfare, Mayor R T Rybak made headlines recently for proposing a small decrease in property tax rates for Minneapolis homeowners.
Yet when he released his budget document Monday, we see he is actually proposing a City of Minneapolis spending increase of $24 million or 2.2%. Notably, salaries and wages go up 4.2% and fringe benefits go up 7.3%.
No surprise, when you look at the actual budget numbers (click here and see p. A6 of Rybak’s budget) spending is going up!
So how does City spending go up $24 million, but Mayor Rybak touts property tax relief?
The positive headlines betray a deeper story of political sleight of hand and bailouts that will cost every Minnesotan who doesn’t have a Minneapolis zip code.
Just two short years ago, Mayor Rybak was poised to drive the city of Minneapolis over its own fiscal cliff.
Several ticking time bombs were ready to go off in succession to cripple the city’s finances. Of course, the city wouldn’t reach that cliff until the year 2020, long after Rybak’s twelve year term as mayor ended. But his legacy and the financial health of the city were in jeopardy, not to mention a run for higher office.
The first fiscal cliff was a challenge faced by almost every major city run by Democrats – huge unfunded liabilities in their pension plans. This happens to cities when the mayor and city council buy votes and support from the public employee unions over the years by granting them overly generous pension benefits.
But Minneapolis also had two other problems threatening the city’s finances and forcing huge property tax increases on homeowners and businesses.
The first was the Minneapolis Convention Center which relies on a $12 million annual subsidy from the city. It was originally funded with a half-cent dedicated sales tax that was set to expire in 2020. In 2011, realizing that revenue from the sales tax was going down and costs were going up, the future was bleak for the Minneapolis Convention Center.