Minneapolis Mayor Jacob Frey’s recently released budget proposal for 2020 is long on ambition – and pricey. Frey is asking for a record $1.62 billion to run the City of Lakes next year. That’s a 3.5% budget increase and it will require a 6.95% property tax increase to set things in motion. Property taxes and charges for services such as sewer and water are the city’s primary sources of revenue.
If the City Council agrees with the mayor, the new budget will take effect on January 1, 2020. What does that mean for the taxpayers of Northeast?
If you’re a homeowner…
Get ready to pay more taxes on your homestead. The mayor’s budget assumes that a lower-priced home increased 4% in taxable market value this year, and more expensive homes increased 6% during the same period. Owners of medium-priced homes would bear the relative burden of the tax levy, at 7.8% increase. According to the City Assessor’s page on the City of Minneapolis website, “Market value is the price that could be obtained if a property is sold under competitive, open-market conditions. Assessors are required to value property at 100% of market value.”
If you’re a business owner…
The cost of doing business will go up. Small businesses will take more of a hit percentage-wise than larger businesses. For example a commercial property valued at $40,000 will see an 8.2% increase, while a larger property valued at $5 million would see its property taxes go up 7.5%
If you’re black, indigenous or an immigrant business owner of color, you may be eligible, under the mayor’s proposal, for a no-interest loan from the Minneapolis Commercial Property Development. The loan does not get repaid until the property is sold.
If you’re an apartment dweller…
Renters, watch out for rent increases! The greatest share of the proposed property tax increase – 12.2% — goes to owners of apartment buildings. Large or small, landlords will see a 13.5% levy increase.
If you’re a neighborhood association…
You already know that the money from the tax increment finance district created by the State of Minnesota is going away. It’s a loss of more than $7 million to the city. Frey proposes to ease the pain and keep neighborhood programs going by shifting money from the Consolidated Redevelopment Tax Increment Financing District Fund, a 3% increase from the FY2019 revenue amount. Neighborhoods may also see a loss of control, as City Council members will have a say over fund dispersal.
If you’re Central Avenue…
The mayor wants to recognize what Northeasters have known all along – the main northbound artery out of downtown is a cultural mecca. Frey has proposed to create six cultural destinations in the city, and Central would be one of them. Central’s share of the pot would be approximately $125,000 in new funding for lighting, trash pickup and street sweeping.
In his Aug. 15 address, Frey said, “I remember visiting my grandparents in Queens, New York City. They’d take me to Bagel Oasis to purchase – you guessed it – everything bagels. It wasn’t just a transaction. It was an experience. An experience made rich by cultural heritage. Not just my Ashkenazi Jew heritage. In the same area you found culture – from Puerto Rican to Italian, Jamaican to Ethiopian to Chinese – bursting from the sidewalk. But this wasn’t just about having a new experience. The place was made special because a plethora of different communities had, for generations, created an ecosystem that both gave to the neighborhood and was duly supported by it.”
If you walk around the neighborhood…
The mayor has asked for increased funds for clearing snow from the corners during winter.
There are several other initiatives in Frey’s budget. You can access the proposed budget at http://www.minneapolismn.gov/budget/2020-budget. The text of his speech is at http://www.minneapolismn.gov/www/groups/public/@finance/documents/webcontent/wcmsp-220293.pdf.
The City Council will hold public hearings on the budget in September, October and November. The final 2020 budget will be adopted in December.
Below: Homesteaders would pay more across the board than residences that are not homesteaded.
Property tax increase table examples.
Mayor Jacob Frey (Provided photo)
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