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Minneapolis Mayor R.T. Rybak proposed on Wednesday raising the city's property tax levy by 1.7 percent next year, partly to pay for more police and firefighters ahead of a looming "silver tsunami" of retirements.

The levy increase was a departure from last year, when he held property taxes flat in the face of a taxpayer revolt. But the mayor claimed the rise in the levy would have been doubled had it not been for recent Vikings stadium legislation that directs less property tax revenue to the aging Target Center.

The mayor's office said at least 70 percent of homeowners would see no increase -- or possibly a decrease -- in their city property taxes because commercial property values have been stronger than residential values.

City Council members reacted positively to the mayor's budget proposal, which they will vote on later this year. A separate panel, the Board of Estimate and Taxation, must approve the levy.

On Monday, St. Paul Mayor Chris Coleman proposed a 2 percent property tax levy increase for his budget.

Rybak said his spending plan will boost the city's police budget by $2.5 million next year, an increase that amounts to about 1.8 percent more than 2012. That will allow the city to have 10 additional officers by next summer, Rybak said.

The mayor also proposed starting a new recruit class of firefighters using one-time 2012 dollars, noting that the average age of a Minneapolis firefighter is 46 and younger workers are needed.

Additionally, Rybak said he wanted to add $1.1 million to the fire budget annually over the next five years. That won praise from Fire Chief John Fruetel, who said the extra funds could pay for as many as 15 new firefighters in the coming year.

The chief stopped short of saying that the total number of firefighters would increase. He estimated that 30 could retire annually over the next five years, meaning the extra funding would not be enough for the department to grow. But losing those longtime employees also would likely free up more money to hire additional staff members, Fruetel noted.

"This support that the mayor is proposing today is certainly appreciated by me as chief, because I know I've got that attrition bubble coming down the pike and I need to start" preparing for it, Fruetel said.

Council Member Gary Schiff, who has criticized Rybak's handling of fire staffing, described the proposals as a positive step to reverse damage done through layoffs and other departures. Still, he added, "it's going to take many years of hiring classes to build back the Fire Department."

Firefighter union president Mark Lakosky, also a frequent antagonist of the mayor, said the proposal is "the right direction financially to try to get ahead of" attrition.

Rybak also proposed moving key functions out of the city's Regulatory Services Department. That plan includes putting business licensing and development review into the Department of Community Planning and Economic Development, weeks after his former chief of staff was confirmed for that agency's top position. He said the change, if approved, "would be the most significant reorganization of city government that we've had since 2002."

The restructuring is expected to save the city between $300,000 and $400,000 a year by eliminating some management positions in the Regulatory Services Department. Schiff said he was told that regulatory services chief Greg Stubbs, whose appointment he voted against last year, would be leaving after just nine months.

Stubbs did not return phone messages, and a regulatory employee said Wednesday that he was not available to meet with a reporter. When asked whether Stubbs was resigning, Rybak said in an interview, "I'll have more on that."

Council Member Lisa Goodman said the regulatory restructuring will improve a licensing process that constituents tell her takes too long and often treats customers poorly.

"I think that it's important to put business licensing in a location where people take growing businesses seriously," Goodman said.

The levy would have been 3.4 percent this year, Rybak noted, if the Vikings stadium legislation had not directed city sales taxes to pay for Target Center bills, rather than property taxes. He specifically thanked pro-stadium members of the council, which voted 7-6 to approve the stadium deal.

"They gave courageous leadership to make it possible to put more cops and firefighters on the street, to make significant investments in paving and bridges and growing the tax base, while cutting ... our property tax increase in half," Rybak said.

Council Member Betsy Hodges, who heads the budget committee, said she will be paying close attention to how this year's budget affects next year's. That's because a number of properties are expected to leave the tax rolls to help pay for neighborhood programs.

That doesn't mean next year's levy will be particularly high, but instead that homeowners will have to take on more of the total tax burden. "What we do in 2013 can make a difference to how painful 2014 feels to people," Hodges said. • 612-673-1732 • 612-673-4210