By Katie Kieffer
At the end of the day, many things in life come down to money. And Monday night was no exception. As the Vikings took on the Giants in Detroit during Monday’s rescheduled game after the Metrodome collapsed under 18 to 20 inches of snow, many Minneapolis residents had something other than football on their minds: Taxes.
Instead of watching the game from the comfort of their homes, Minneapolis property owners bundled up and braved the frigid wind chill to attend a “public comment hearing” on the proposed 2011 property tax levy at the Minneapolis City Hall.
As one resident named Scott* told the City Council, “I’ll be honest with you, I don’t want to be here tonight. In fact, if you gave me every place on the Earth where I could be, this is the last place. But… I do want to thank you for doing something … getting me active in local politics.”
Residents expressed these key concerns:
Insufficient notification of proposed tax-related meetings
One Minneapolis home-owner told the City Council on Monday night: ”I also want to express my disgust at the scheduling of sending out the [proposed] tax statement. It appears it was sent on the 16th, received on the 17th and the first meeting was on the 18th.”
He continued, “Since this comes around once a year it would seem that we [Hennepin County] would be pretty good at scheduling meetings by now. I also want to say that the people that you see here are probably only a fraction of the people who wanted to get here. We have to drive down here [in rush hour for a 6:05 pm meeting the day after a historic blizzard].”
Negative impact on small businesses in Minneapolis:
A small-business owner named John who owns a building with several small tenants including a coffee shop on Lake Street in Minneapolis’ “Uptown” area, said: “You [the Mayor and City Council] are in control of what is going on in this city. You have to take responsibility for what you are doing to small businesses in this city.”
John’s building needs a new roof and other repairs that cost several thousands of dollars. However, he determined that after paying his increased taxes, he will only have “$300″ remaining in his budget for property repairs.
A small business owner named Bill told the Council, “I would look around the room and think of everyone here as a customer of yours, and there’s just a lot of angry customers, and if you drive your customers out of your place of business, who is going to pay for anything in the end? I would think of you guys as being a business owner… It’s a little frustrating being a customer to a business that doesn’t seem to listen or doesn’t seem to want to keep the customer happy.”
A Minneapolis condo-owner named Leah pointed out that high commercial property taxes are ultimately passed down to all residents:
“…another factor being called out for increasing property taxes is the decrease in commercial property values placing the burden on residential properties. However, I would like to point out that commercial real estate houses all the businesses, retailers and commerce that makes up our economy; playing a very important role in all of our well-beings.”
She added, “Another thing to consider about commercial property taxes is that they are passed down to tenants who occupy commercial properties (businesses/retailers) and then are further passed down to consumers (i.e. residents!). So, we as residents and consumers ultimately bear the burden of property taxes no matter what.”
Bloated public pensions:
- Closed pension fund obligations for “retired police officers, firefighters and their dependents” account for a majority of the tax increase, reports MPRnews. The City of Minneapolis is currently suing the pension funds for “overcompensating fund members and overcharging the city,” so this obligation remains in the balance.
- Time Magazine – reported data from the Bureau of Economic Analysis in its Dec. 13, 2010 issue indicating that the average public sector employee has a salary of $81,258 and a benefits package worth $41,791 whereas the average private sector employee has a salary of $50,462 and only has benefits worth $10,589.
- Hennepin County’s “proposed property tax for 2011 increase” explanation letter that was mailed in mid-November to Minneapolis property-owners notes that the tax hike could have been avoided entirely if pension direct levies had not increased by 48.4 percent from 2010 to 2011. The letter states:
- “The City would have been able to fund core operations and propose a decrease in the property tax for 2011; however, in order to meet rising pension obligations – largely to three closed pension funds, the Minneapolis Police Relief Association, the Minneapolis Fire Relief Association and the Minneapolis Employees Retirement Fund – the Mayor has proposed a 6.5 percent increase [the City Council proposed and approved a 4.7 percent increase after pressure] in the property tax levy (a $17.4 million increase).”
- A bar chart included in Hennepin County’s letter also indicates that the City of Minneapolis’ pension obligations for the aforementioned funds jump dramatically higher in 2012 and 2013, leaving taxpayers with no hope for relief down the road – only promises of climbing property taxes.
Minneapolis is now considered the second-most dangerous city in the U.S. when it comes to falling property values. Meanwhile, the city’s unemployment rate has increased to 6.7 percent from the month of May’s level of 6.1 percent. I think a Minneapolis home-owner named Sean offered the best solution: “It’s time to cut the budget.”
* I did not include last names in order to protect the privacy of the speakers.