Taxes

KFAI Radio Interview

On October 19th, KFAI radio (90.3 FM) aired a news story on the First Ward Council race. Four of the five competitors were interviewed, and those interviews were edited into individual segments. Here's mine:

Northeaster Candidate Questionnaire

As I was out doorknocking Monday and Tuesday afternoon, I saw the latest Northeaster being delivered. In case your copy didn’t make it all the way to your front steps (or got too wet to read), here are my answers to the Northeaster’s candidate questionnaire:

1) YOUR BACKGROUND: EMPLOYMENT, EDUCATION, COMMUNITY SERVICE, VOLUNTEER JOBS, ETC., AS THESE EXPERIENCES MIGHT RELATE TO YOUR QUALIFICATIONS FOR THIS OFFICE. (100 WORDS OR LESS)

I came up through the NRP system. I was recruited onto my neighborhood Board and served two terms as President. From grassroots outreach to working with City officials on neighborhood projects, I’ve done everything a volunteer can do to address community concerns.

I was the first volunteer for the Northeast Citizen Patrol. I’ve put in thousands of hours across every Northeast neighborhood making a stand against crime. I’ve heard the worries of people our entrenched political system overlooks.

I’ve been a Northeaster for 18 years, after being raised in southwest. I know how the rest of the city sees us.

2) WHY ARE YOU RUNNING, AND WHAT IS YOUR MAIN PRIORITY? (100 WORDS OR LESS)

Taxes keep going up while services are being cut. City Hall puts pet projects ahead of streets, cops and firefighters. I say, “Basics First!”

A Priority Test

The StarTribune published some good news for Minneapolis residents. Low interest rates will allow City Hall to refinance some bonds and save $8 million.

"There is a big demand for municipal debt due to its perceived safety," said Michael Abeln, director of capital and debt management for the city of Minneapolis. "Because there is a lot of demand, the rates that we have to pay are dropped."

Bond investors trust City Hall to make good on its promises. That trust is well-founded. Our city has earned a great credit rating. But what about the promises City Hall makes to residents? What happens to that $8M—which was our money in the first place?

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Mr. President, I Couldn’t Agree More

One of my policy ideas is to encourage volunteer groups that make our city work better. I see that as the best way to maintain our quality of life while keeping a lid on taxes. And, empowering volunteers creates engagement from the bottom up. People participate where they can make a difference on issues important to them.

President Obama agrees:

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$10,000 Trade-off

As an example of the trade-offs a Councilmember faces, consider this StarTribune story about the lawsuits between City Hall and old firefighter and police pension funds:

The city alleges that the funds are improperly including some fringe benefits that shouldn't be included in the salary base for calculating pensions. …  In pretrial rulings, [a Judge] found merit in substantial aspects of the city's arguments, and the two sides have engaged in extensive settlement discussions.

If the city wins, the decision could cut the property tax levy for pensions next year by $11 million, according to city finance officials.

The financial drain on the city also is increasing sharply next year, because of investment losses caused by market declines and because of a Legislature-approved change in assumptions about the longevity of retired police officers. Those costs are the biggest reasons that Mayor R.T. Rybak has proposed an 11.3 percent property tax increase for next year.

According to the reporter, the funds have made an offer that would reduce the City’s obligation next year by more than $14 million.

First, it appears the funds are offering more than the City hopes to gain through its suit, $14M vs. $11M. But I expect the devil is in the details. Are the funds offering a one-year adjustment, or are they willing to correct the seemingly inflated basis-of-pay calculations?

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Business Day at City Hall

Last Friday, September 29th, was Business Day at City Hall. This was a gathering organized by the City of Lakes Chamber of Commerce aimed at developing an open and constructive dialog between the business community and City officials. I was the only candidate from my Ward—and perhaps the only non-incumbent City Council candidate—who thought hearing from business interests was important.

It was a worthwhile event. The day began with a short talk by Mayor Rybak. R.T. listed many benefits the city has offered to businesses in recent years. But he never mentioned the costs. And many of the things Rybak highlighted—like commute rail—benefit suburbanites much more than Minneapolis residents. We make it as easy as possible for outlanders to come work in tall buildings owned by other outlanders. It seemed like R.T. saw Minneapolis as a destination, not a home.

After the Mayor, we heard a report about taxes from the Chamber. Businesses pay 33% of all property taxes collected by the City, while homeowners pay 44%. Minneapolis taxes are the highest in the Metro area. In addition, business fees have risen over 11% in the last four years. The Chamber did credit City Hall for keeping spending down.

League of Women Voters 2009 Voter Guide

The League of Women Voters offered all candidates the opportunity to answer a few questions for an online Voter Guide. There’s no direct access to the First Ward races, but it’s pretty easy to find them. Go here and enter your ZIP code to get started.

To save you a few clicks, here’s what I had to say:

1.  Relevant Experience:

Two terms as Audubon Neighborhood President, and two terms as Treasurer. Ten years on our neighborhood Board. Currently Land Use Committee Chair. Participant in many community planning initiatives. Led survey of Latino housing needs. Served on the City’s Community Engagement Task Force. Founding volunteer of Northeast Citizen Patrol.

2.  Education:

B.S. in Economics from the U of M. Graduate of De La Salle High School. Attended Kenny for elementary and Anthony for junior high. Neighborhood organizer and financial training through NRP. Completed coursework to become a life coach. As an entrepreneur, I have learned many things they don’t teach in schools.

5.  What issues do you think the city will be facing in the next 4 years?

Our city is facing a huge loss of revenue. City Hall is on an unsustainable fiscal path. The City Council cannot keep spending as it has without imposing more tax hikes that will drive more people out their homes and businesses. Another wave of home foreclosures looms.

Zoning Business Out

Today I attended a networking event held by the Northeast Chamber of Commerce. I was the only candidate there. My goals were to hear the concerns of our business community and to build awareness of my campaign.

Their top concern was taxes. Our businesses have trouble growing and surviving when City Hall takes so much from both them and their customers.

This problem was documented in a recent StarTribune story:

When Minneapolis hardware store owner Jim Welna got the chance to buy a building in the next block on Franklin Avenue and quadruple his floor space, he sat down to run the numbers.

They didn't add up -- in large part because of the property tax he'd have to pay. He figured that he would have to budget nearly $140 from each day's proceeds just to pay that $50,000 annual bill.

"I couldn't see a business model that would allow me to factor those taxes in and keep prices affordable," said Welna, who is chairman of the Seward Civic and Commerce Association.

Another concern, perhaps not appreciated by a candidate without my community development experience, was zoning. City Hall’s current zoning policy makes it expensive for a successful business to grow in place. Many times zoning allows no growth at all.

Why are taxes going up?

A member the obscure Board of Estimate and Taxation offers comments about taxes in our fair city:

As to the question of higher taxes, yes, taxes have gone higher for many homeowners. There are several reasons for that. For individual homeowners, they are paying a higher percentage of the overall tax bill. This is due to a couple reasons. First residential property values have increased relative to commercial values. The second reason is that the legislature made changes in the tax system to reduce commercial property taxes. Now it is like a balloon, squeeze down one side and the other pops up. Ten years ago, homeowners paid about 35% of the total tax bill while last year we were now near 60%. This year this is coming down as residential values decline relative to commercial values but not very much as commercial values have started to decline also.

This is merely a technical explanation of how part of the tax burden is borne. More directly, taxes are higher because the City government is spending more and exerting more control over our lives.

Property taxes are only one of the costs of government. The sales tax, various fees and licenses, and most nefariously, the cost of complying with City ordinances all drain productive energy from those who live and work in Minneapolis.

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A Candidate for the Rest of Us

Do you think our city government needs to grow up? Are you tired of them spending your money chasing rainbows instead of providing competent core services?

Government’s job is:

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