The St. Paul City Council on Wednesday unanimously approved an $805 million 2023 budget that includes a nearly 15% increase in property tax collections, drawing frustration from homeowners who said the higher bill will squeeze already-tight budgets.
About half of the 14.65% levy increase will be offset by a decrease in residents' street maintenance bills, after a May court ruling said routine services must be funded by taxes instead of fees.
The rest of the property tax hike will cover inflation and added operating costs, city officials said. The levy — which will total $201 million in 2023 — is the amount the city collects in property taxes, not the amount that individual owners pay.
"I know we all have struggled with the levy increase. We know people really are struggling now," Council Member Chris Tolbert said Wednesday. "It's almost a Catch-22. … The increased property bills are hard on people. But at the same time, when things get tough, people rely on city services more."
The council approved a property tax levy $1.1 million lower than what Mayor Melvin Carter proposed in August, mainly by adjusting projected sales tax revenue, which came in higher than expected for 2022. The council also made a few cuts to city department budgets, including a $350,000 reduction from what Carter proposed for the Office of Neighborhood Safety, which recently received $4 million in federal American Rescue Plan dollars to distribute for violence prevention work.
But with inflation already affecting day-to-day costs from gas to groceries, dozens of residents who attended Tuesday's truth-in-taxation hearing urged elected officials to make even more cuts.
"I live on a fixed income," said Brian Bergson, a former state legislator who lives in the Merriam Park neighborhood. "My family budget, because of these increases, is going to be in a deficit."
The owner of a $266,300 median-value home with a 40-foot lot would see their city property tax bill grow by $262 next year, according to preliminary data from the Ramsey County Assessor's Office, while their assessment bill for street work would shrink by $103. That homeowner will end up paying $2,268 for all St. Paul taxes and fees, not including additional taxes owed to the county, school district and regional rail authority.
Tax bills are influenced by other factors, too, including changes in the assessed values of homes and other properties in the city. Neighborhoods that will be hit hardest because of value increases include Frogtown, Hamline-Midway, Dayton's Bluff, Payne-Phalen, Sun Ray-Battle Creek-Highwood Hills and the Greater East Side.
Meg Duhr, a board member of the Fort Road Federation district council, told City Council members Tuesday that she's seen neighbors get priced out of their homes. She said she worries that an increasing number of properties in the W. 7th neighborhood could be purchased by out-of-state investment firms with little stake in the community.
"I generally believe in government and paying my fair share," Duhr said. "We can pay these taxes right now, but seeing how this has spiraled makes me wonder about the future and how much longer it will be affordable."
'Core city services'
Carter has called his 2023 budget a "nuts-and-bolts" fiscal plan, which contains funding for 14.5 new full-time city workers.
The budget also includes $24 million for deferred maintenance of city facilities, as well as ongoing funding for three major capital projects announced last year: the North End Community Center, Fire Station 7 and the Hamline Midway Library.
"We engage our community in building a budget to ensure it reflects our shared values and helps us deliver the core city services our residents have come to expect," Carter said in a statement Wednesday. "I look forward to signing this budget and investing in the long-term stability of our city."
In recent weeks, the council tweaked the budget to include $320,000 for efforts to improve library safety, $356,000 to prevent streetlight wire theft, $470,000 for vegetation management, $480,000 for bike and pedestrian safety improvements, and $10,000 for free swimming lessons. The council is also repurposing a vacant administrative position to staff work on a reparations program for Black descendants of slaves.
Council President Amy Brendmoen said St. Paul is still catching up from the impacts of the pandemic, when the city did not raise its property tax levy for a year to avoid burdening residents.
"It is my goal — and I think the entire council's goal — to really try to get a steady 2% or 3% increase going forward," Brendmoen said.
She and other council members also pledged to lobby the state government, which announced a historic $17.6 billion surplus Tuesday, to increase local government aid.
