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Hodges unveils 2015 Budget

Minneapolis Mayor Betsy Hodges unveiled the city’s 2015 fiscal year budget on August 14th in a speech to the City Council. Hodges, who was elected in 2013 amid a crowded mayoral ballot, stated that the upcoming fiscal year budget reflected the priorities of those who voted for her. In her budget remarks she stated:

When we voted last fall, we asked for something bigger than each of us. When we voted last fall, we asked for a city that was well run. When we voted, we asked for action on a vision of growth — to bring more people, businesses, housing and jobs here. When we voted, we overwhelmingly demanded action on eliminating the gaps we have between white people and people of color, and to make sure everyone could participate in the benefits of that growth. When we voted, we asked to reach for something beyond what we had ever before imagined for ourselves.

During her speech before the Council, Hodges said she has “never seen the budget as mere spreadsheets and numbers to manipulate” or “as an intellectual exercise.” She stressed that budget numbers are the drivers of city policy, stating that “true leadership demands we approach it with deliberation and with intention.”

The 2015 budget breakdown can be found on the city website. Some of the highlights listed include a $1 million investment in affordable housing, $3.5 million investment in the redesign of Nicollet Mall, two new hires in the office of the City Coordinator who will “focus exclusively on equity,” hiring of 10 new police officers, and over a million dollars for police body cameras.

Also of note is the fact that after a few years of the city holding the line on taxes, Mayor Hodges announced a 2.4% increase in the tax levy for the upcoming fiscal year. Hodges explained that this is coming after many years of cuts to Local Government Aid, a state revenue sharing program dispensed by the legislature. This program was severely reduced in the Pawlenty years and has since been partially restored by Governor Mark Dayton. Hodges claimed that “one-half of residential properties in Minneapolis would nonetheless see no increase, or would even see a decrease, in the City portion of their property taxes.” What this means, according to the Mayor’s office, is that “for residential properties, only properties that have seen a greater than 7% increase in value in the last year are likely to see any property tax increase. For example, preliminary estimates are that a home valued at $175,000 in 2014 that has increased in value by 10% will likely see a property tax increase of about $31 for the year, or about $2.60 a month in their City taxes.”

Hodges broke down the budget priorities into three major categories: “equity, growth, and running the city well.” The first part of her presentation dealt with the many disparities the city has faced and her attempts to use the budget to deal with them.

Saying that “prosperity is happening for white people, mostly” Hodges said that “for Minneapolis to maximize our growth potential, both short-term and long-term, we must make certain everyone can benefit from and contribute to our growth.”

Beside the City Coordinator positions and the affordable housing investments, Hodges also plans an “investment in an initiative to promote home ownership among communities of color, and help rebuild community wealth in north and south central Minneapolis.” She called for more investments in “youth violence prevention,” and an allotment of $100,000 for the Business Technical Assistance Program, which seeks to “develop entrepreneurship in communities of color.” Hodges described this as “a groundbreaking strategy where the City contracts with local non-profit organizations focused on entrepreneur training and economic development to provide direct services to new and existing businesses.” City officials say this program provides support to small businesses that may not have the technical experience they need to open or expand their operations. This is done through contract work with other organizations such as the African Development Center. Hodges also announced further investments in the city’s Youth Coordinating Board and STEP-UP programs.

Under the growth banner, Hodges included the Nicollet Mall redesign money. In her speech before the Council she stated that “ investments in the growth of Minneapolis can help accelerate our pace of growth, [and] they can help increase our quality of life while inviting more people to share in it.” Calling it “Nicollet Mile” she stated that it will create an “economic boom” in the region and reiterated the city’s pledge of spending $3.5 million on this project.

The Mayor also called for “$750,000 toward the network of protected bike lanes” and money for the “redevelopment of the Upper Harbor Terminal.” Hodges described the latter project as “a project long championed by Council President Barb Johnson” and stated that “this budget provides planning dollars so we can map out a future where North Minneapolis finally has its own valuable riverfront amenities.” The city hopes to use this money to explore redevelopment of the site to provide jobs and a riverfront amenity for residents in North Minneapolis.

Finally, under the aegis of running the city well, Hodges listed several important investments for 2015. First on her budget agenda was the funding for 10 additional police officers, which should bring the total amount of officers in the city to 860. Hodges also called for “nearly $1 million a year for community service officer classes of 20 to the department’s base” and “another $960,000 for a police cadet class of 18 next year.” Another major agenda item was funding for the first round of police body cameras. Saying that these cameras “have been shown to decrease both use of force and complaints about excessive force” Hodges said they should be rolled out initially in the fall. According to the city, research shows that when cameras like this are instituted both the number of complaints and lawsuits against the police force decrease. The money appropriated comes on top of the $400,000 the city approved in 2013 for a pilot camera program that will begin this Fall. (See this valuable piece in the New York Times for more information about police body cameras.) Hodges further announced more funding for “recruit classes” for the Minneapolis Fire Department. She expressed a commitment to the department with a $50,000 investment in its Fire and Emergency Service Explorer Program, which seeks out students in high school who may have interest in a career in “firefighting and emergency management.” Hodges also called for $346,000 to fund four new 911 operators. Additionally the mayor requested money for a “comprehensive pedestrian safety initiative, including durable markings for bicycle conflict areas, high-use vehicle lanes, and at crosswalks.” According to the city, this initiative will include “enhanced lane markings at high volume intersections.” Hodges also described more investments by the city into snow removal, including “sidewalk and corner clearing.”

Mayor Hodges also announced a significant investment in organics recycling, saying that once it begins it “will divert 30% of our waste from HERC,” or the downtown garbage burner. “For an additional $3.34 per household per month,” she added, “the entire city will be able to recycle food waste and surprising things like cotton balls and dryer lint.” The city plans to roll out the program in 2015, and it will be funded by a small increase in the waste fee.

Hodges used the conclusion of her speech to go more in-depth into the city’s financial picture for the previous decade before describing her decision to raise the tax levy. She first described how the city had to make some major cuts during the Pawlenty years, as that former state official and the legislature made significant reductions in Local Government Aid. Hodges also spoke about the difficult work she, Council President Barb Johnson and Vice President Elizabeth Glidden did “to reform our closed funds and spread our obligations over time” (something she mentioned in an interview with your Examiner back in 2012). Saying “we cut to the bone - and then we started cutting bone,” Hodges explained the hardships faced by the city but also said that “Minneapolis is a leaner, more efficient city as a result.” She described how starting in 2008 the city began the “Infrastructure Acceleration Program” to increase work on paving roads and other infrastructure, but said because of this the city would have to pay its debt on these projects in a quicker time scale. Therefore Mayor Hodges announced the 2.4% tax levy. She said despite Mayor Rybak holding the line on increases in his final years in office, “when we don’t account for inflation, no levy increase at all is a cut.” Additionally Hodes stated:

We must catch up with inflation if we wish to keep our basic services – already cut to the bone – functioning. To do that requires increasing the amount of money that we raise in property taxes in order to meet this year’s inflation factor – and do some catching up to years past, to make the investments that the voters asked us to make. This expectation was built into our five-year financial direction when we voted on last year’s budget.

In her closing comments, Hodges reiterated her commitment to reducing disparities in the city. “When we voted last fall,” the mayor stated, “We voted to end our racial disparities and move toward a brighter future altogether. This budget invests in that.” Asking “what will we get for these investments,” Hodges concluded: “We will be a city of young people – including young people of color – who are healthy, safe, ready for the jobs of the future, and invited and prepared to lead us.”

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