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<br />------- Commercial, industrial and residential shares of the city's tax base.
<br />passing on taxes that I think are
<br />way too high," he said. "People
<br />are very afraid:'
<br />Council Member Rob-
<br />ert Lilligren, who repre-
<br />sents neighborhoods south of
<br />downtown, also has noted the
<br />change of tone.
<br />"In my ward, there are
<br />many people who would say,
<br />'Tax me more if I get a cop
<br />on the street. Tax me more if
<br />my street gets better lighting.
<br />Tax me more if my street gets
<br />paved; " he said. "They see a
<br />value in being taxed for some-
<br />thing if they get something in
<br />return. But I think now we're
<br />at a breaking point "
<br />Nearly a decade in the mak-
<br />ing, the situation has been
<br />shaped by forces partly be-
<br />yond the city's control.
<br />It started with a change
<br />in classification rates by the
<br />Legislature that resulted in a
<br />shift of the property tax bur-
<br />1996 PAYABLE IN 1997 2010 PAYABLE IN 2011
<br />TRENDS IN MARKET VALUE AND TAXES
<br />The upward trend in market value and taxes paid fox a home on
<br />E. 50th St. west of Lake Nokomis in south Minneapolis.
<br />Taxable Total Percent
<br />Year market value local taxes change
<br />2003 &165;000 52,438 n/a
<br />7004 5184.800 $2,730 12.0%
<br />2006
<br />2008
<br />a.~~,. ...r~,,.,._ ._,_e_..< ~,„,., . _
<br />dustrral properties to residen-
<br />tial. Arun-up in home values source: City ofMinneapolls Staz lYibune
<br />several closed pension funds
<br />for police and firefighters in-
<br />to astatewide fund also could
<br />have along-term impact.
<br />Knowing the squeeze may
<br />well get worse, the mayor
<br />plans to meet with neighbor-
<br />hood groups incoming weeks
<br />to talk about budget and tax is-
<br />sues in hopes of finding solu-
<br />tions to ease the pain.
<br />"There are no easy answers
<br />to holding down property tax-
<br />es and continuing to fight to
<br />lower crime and fix the pot-
<br />holes in aperiod where all the
<br />buildings are worth less and
<br />there are huge cuts from the
<br />state and there are huge pen-
<br />sion debts;' Rybak said. "But
<br />part of my job is to get the
<br />right balance."
<br />The mayor's long-term
<br />strategy is to attract business-
<br />es downtown to fill up office
<br />buildings and increase their
<br />market value. boosting the
<br />`"I'he more people in the
<br />city, the more they share the
<br />burden;' Stiles said.
<br />There are signs the down-
<br />town business climate is im-
<br />proving. Vacancy rates down-
<br />town declined slightly in 2010
<br />while employment was up,
<br />according ro Sam Grabarski,
<br />president and CEO of the Min-
<br />neapolis Downtown Council.
<br />"We're not out of the woods
<br />yet;' Grabarski said. "But
<br />Rybak is correct - if down-
<br />town thrives, it really helps
<br />in sustaining the neighbor-
<br />hoods and the police and the
<br />fire protection throughout the
<br />whole city."
<br />For Steve and Rachel
<br />followed, bringing a steady
<br />climb in property taxes. On-
<br />going cuts in state aid to local
<br />governments, along with the so actually cut the budget;' said
<br />Scot Pekarek, 37, a Realtor and 'irnro feazs
<br />After hours of testimo-
<br />city's financial commitment rental property owner whose ny that December night, the
<br />to sports and entertainment home is in the East Calhoun City Council approved a $1.36
<br />venues and its obligation to neighborhood. billion 2011 budget that rais-
<br />pay into public pension funds Others said they simply es citywide tax collection by
<br />added to the burden. can't afford to pay more. 4.7 percent, down from the ZS
<br />Then came the recession, "I didn't lose my job. I'm not percent maximum increase
<br />job losses, wage cuts and the out of work. But I'm just think- proposed in August. The
<br />housing crash. City, county and hig,'In a down economy, this is council also cut the city work-
<br />schooldistricts have struggled, acceptable behavior by my lo- force by 80 people, including
<br />looking to tax increases as part cal government?"' said Steve 32 firefighters and 24 police
<br />of the solution. Maves, a 37-year-old engineer officers.
<br />Even so, public jobs and who also faces adouble-digit The vote offered no reas-
<br />services are being cut, mak- percentage tax increase on his
<br />ing the tax increases sting south Minneapolis home. surances.
<br />"There are two fears here;' Maves, good news can t come
<br />soon enough. They bought
<br />even more. The pain will be felt outside Becker said. "One is that we're their Phillips area home for
<br />"I was born and raised Minneapolis, too. getting screwed. And the sec- about $180,000 eight years ago,
<br />here and have never left the "Things don't stop at the and fear is that it's going to get seeing it as the perfect place to
<br />city and I don't particular- border;' said Mark Haveman,
<br />But the tax situa- executive director of the Min-
<br />want to
<br />l worse:'
<br />The city projects its tax need raise their four children.
<br />"We just love the diversi-
<br />.
<br />y
<br />tion is something they need nesota Taxpayers Association. will increase by 5.5 percent to ty;' said Rachel Maves, astay-
<br />is a
<br />"The cit
<br />h
<br />to address," said Joyce Suek, Minneapolis has "benefits that
<br />who faces adouble-dig- other cities take advantage of."
<br />59 6.7 percent in each of the next
<br />five years. y
<br />ome mom.
<br />at-
<br />very rich place for families
<br />,
<br />it percentage tax increase on Tens of thousands of work-
<br />her home near Lake Nokomis. ers commute to Minneapo- In an economy where few
<br />can dream of annual salary to be:'
<br />Their home's value has
<br />l
<br />hi
<br />h
<br />f
<br />m
<br />"I can afford it. Some people lis each day. Thousands more increases of that magnitude, near
<br />y
<br />g
<br />o
<br />a
<br />dropped fro
<br />can't. And Iwon't beable to af- show up at night to take in some owners are feeling that $200,000 to about $165,000 in
<br />ford it forever." sports and entertainment ven-
<br />nes and restaurants. the math is against them.
<br />"You can't pay your wort- 2010. Their property taxes are
<br />still rising.
<br />"While they're here, we take
<br />>n bubbled care of them;' said John Stiles,
<br />ber night at communications director for
<br />Hall budget Rybak's office. `.If there is a fire
<br />Many scolded the mayor and
<br />council members for what they
<br />saw as poor management and
<br />for not cutting deeper at a time
<br />when homeowners are making
<br />their own tough choices.
<br />"I think there has to be a
<br />more creative way to not only
<br />cut the rate of growth, but to al-
<br />to a'P
<br />heart
<br />to respond. And if you have an
<br />accident on the street, Minne-
<br />apolis cops will respond ...
<br />"There are a lot of benefits
<br />to hosting these people. But
<br />the burden falls on Minneap-
<br />olis property owners."
<br />food, "saic
<br />laid off frw
<br />at the Unix
<br />to in Septe
<br />feels "clos,
<br />buzz saw."
<br />,her
<br />No easy answers
<br />How bad it gets over the
<br />next year depends on how
<br />much the Legislature cuts
<br />from the current $8Z5 mil-
<br />e Maves said some
<br />ors have told him that
<br />be gone if not for the
<br />h real estate market.
<br />t his wife have thought
<br />noving, too.
<br />'re feeling trapped,"
<br />said.
<br />Hakes me think 'Do we
<br />it's going to get any
<br />' If it's not, I should just
<br />,y huge loss and leave
<br />stead of sticking around
<br />~ five vears, being in an
<br />
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