2011 Budget - Why I Voted No

For the first time as Council Member, I voted against a budget. I do not take this vote lightly. In all past budgets, there have been things I would have liked to change and fights that I have lost. These issues have not been important enough for me to vote against the final budget.

This year’s assault by the Mayor and Council majority on the already-allocated Neighborhood Revitalization Program Phase II funding is fundamentally different. I could not in good conscience vote for a budget that reneges on the commitments the Council has made over the years to neighborhoods. One we unanimously reaffirmed this June when we voted to allocate the full NRP Pahse II funding to our partners in neighborhoods.

I am saddened that neighborhood organizations will no longer be able to rely on the commitments – or even the formal actions – of the Council majority. I am disappointed in my colleagues’ decision that will, in my strongly-held opinion, fundamentally damage both the capacity of neighborhoods to serve Minneapolis residents and their capacity to collaborate with the City.

And this is doubly important, given one of the subtler implications of the Council majority's action. Due to this action, neighborhood groups no longer have a dedicated funding stream tied to the Tax Increment Financing districts. All of the commitments the City made to neighborhoods up until today included a dedicated funding stream for "Phase 3." This was important because it made it more difficult for the City to raid neighborhood funding to pay for other things. If the Council majority continues to move down this path, NRP Phase II dollars will pay for the first few years of "Phase 3"... and then what? It's fairly clear that the next step, unless neighborhoods organize an effective opposition, will be to continue to cut City funding to neighborhoods until it is entirely gone. No commitments or promises made to the contrary by the Council majority are to be believed at this point.

And we should be clear about one important fact: the action to freeze Phase II dollars has no impact whatsoever on the 2011 budget, the only action the Council was required to make this December. Rather, this decision improperly presupposes that the cuts in the 2012 budget will come from neighborhoods. Rather than taking the time to explore all options and work with our neighborhood partners, the Council decided on these cuts to neighborhoods this December.

City of Minneapolis leaders decry the decisions at the State level to renege on commitments made to local governments through Local Government Aid. Yet, when budget times get difficult, the Council majority makes clear that it will break its word just as readily as Republican governors.

I would note that this is a tragic example of the success of conservative Republican government in the State of MN. Speaker after speaker at the public hearing on the budget railed against City spending - despite the fact that City spending, when adjusted for inflation, will be lower next year than it was ten years ago. Speaker after speaker said that there is no revenue problem - despite the draconian Local Government Aid cuts to Minneapolis since 2002. The creation of the decentralized and empowering neighborhood revitalization program, and the building of neighborhood capacity that resulted, is one of the most important and striking accomplishments in Minneapolis in the past three decades. Now, by starving Minneapolis of LGA, forcing increasing reliance on regressive property taxes, and shifting the tax burden from wealthy commercial property to struggling homeowners, Republicans have enlisted the support of the DFL Mayor and Council majority in destroying that capacity and undoing that progressive accomplishment.

It is very important to note that the neighborhoods most impacted by the freeze in Phase II dollars are among the poorest in Minneapolis. They include Central, Hawthorne, Near North, Whittier and Cedar Riverside, which are each poised to lose hundreds of thousands of dollars due to the Council majority’s decision. As such, this decision is inherently and unavoidably unjust.

I want to be clear that I am strongly in favor of cutting property taxes. But I believe that there are deeply unpopular and unsustainable decisions that the City has made in the past that must be reviewed and reconsidered. It is time that we do a complete and thoughtful study to identify budget cuts that can be made to major expenses that offer little or no direct n=beneift to the residents of Minneapolis.

It was especially disheartening that the Council majority was unwilling to approve a motion made by Council Member Lilligren that I helped draft that would have directed our Finance department to identify options for property tax relief for the years 2012 and 2013 and report to back with a plan for providing at least $5.5 million dollars in tax relief each year. The motion called for a plan that would consider all sources of potential property tax relief. It also, wisely called on our Neighborhood and Community Relations department to work with the Neighborhood and Community Engagement Commission and develop and implement a process to engage residents, neighborhoods and neighborhood organizations in the discussions.

I believe that such a study needs to be done if we are to have a chance of developing a good budget with community involvement that can both hold down property tax increase and avoid unwise cuts with dire consequences in the future. Such a study should take a careful look at all sources of potential property tax relief including, but not limited to:
1) The new consolidated TIF district,
2) All other TIF districts,
3) The Arena/Target Center ownership funding,
4) Entertainment Tax revenue
5) Convention Center Fund
6) The Municipal Parking Fund
7) The Self Insurance Fund
8) The new Neighborhood Community Relations Department
9) The Affordable Housing Trust Fund
10) Community Development Block Grant resources
11) All major contracts with outside firms, for possible renegotiations, including those with:
Unisys for technology services, Meet Minneapolis and USI Wireless

I think perhaps the best example is the Target Center. It is critical for every resident to understand that while the Council majority was voting to damage neighborhood organizations by freezing their funds, Target Center debt was held completely harmless.

I will note that the Council majority and Mayor also held ourselves harmless, even as we were forcing cuts to neighborhood organizations, to Public Housing and to many of our departments. Neither the Council nor Mayor took a dollar in cuts. In fact, the Council amended the Mayor’s proposed budget to shift a proposed one-time cut to the Clerk’s Office. I find this highly objectionable.

I would like to specifically call out the few Council Members who partnered with me in this effort and voted with me to reduce the harm to neighborhoods. Robert Lilligren, who worked with me instensely in search of solution the last few days, Kevin Reich, and Diane Hofstede.

Still, I am deeply disappointed to have to disagree with so many of my colleagues and the Mayor on this fundamental decision. But I am more saddened by the prospect of the very real damage that this budget will have on neighborhood organizations.