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February 23, 2009 (MINNEAPOLIS) – Despite facing $30 million in state funding cuts, Minneapolis Mayor R.T. Rybak today announced that his revised 2009 budget for the City of Minneapolis will not include significant cuts to public safety or public works, which are the City’s two main business lines that make up around eighty percent of the City’s budget.

“The City of Minneapolis’ finances are strong and we have done the hard work necessary to weather these difficult times without serious cuts to public safety or our transportation infrastructure,” Mayor Rybak said in a speech today before the Minneapolis City Council.

“We accomplished this enormous task because we paid off millions of dollars in debt, reformed and restructured City government finances, and delivered City services more efficiently. Our wise fiscal management, combined with one-time economic recovery dollars from the federal government allows us to preserve our commitment to public safety. If not for that strong long term fiscal stewardship by the city of Minneapolis, the problems we face today would have been much worse,” Rybak said.

“Unfortunately for Minneapolis and other cities across Minnesota, the State budget lurches from crisis to crisis,” Rybak said. “Minnesota’s budget has not had the same long term fiscal stewardship as Minneapolis has had. For too long, the State has used short term budget fixes, and avoided strategic choices. Today’s State fiscal crisis, like the one that happened in 2003, and one we can probably expect a few years from now, could have been partly avoided if they adopted some of the long term fiscal management that has helped us restore fiscal stability to the City of Minneapolis.”

Numerous Strategies Used to Prevent Public Safety Cuts in 2009

If allocated equally across the city, the Governor’s proposed cuts to Minneapolis for this year would have lead to the elimination of 161 jobs, including 57 sworn officer positions and 19 civilian positions in the police department and 27 firefighter positions. Mayor Rybak’s proposed budget avoided those deep cuts by:

Using $7.6 million freed up by paying down City debt - In the past six years the City has paid down or avoided almost $90 million in debt, meaning there is an additional $7.6 million to spend on basic city services this year.

Focusing cuts on management positions – Of the 59 city staff positions eliminated in Rybak’s proposed budget, nearly half (27 positions) are more expensive management jobs.

Eliminating some City services – Rybak is proposing to eliminate a lab in the health department and shift discrimination complaint services to the state. He also proposed that the City no longer maintain State highways that run through Minneapolis.

Developing new revenue options – A new street light fee will help pay for maintenance and repair of street lights. The fee means property owners will pay $8 more this year on their utility bill.

Federal Stimulus – Rybak is proposing to use one-time funds provided by the federal Recovery and Reinvestment Act to pay for 76 positions in the police department, including 57 sworn officer positions which would have otherwise been cut.

As a result of these strategies, there will be no layoffs in the Minneapolis police department or fire department; six vacant fire department positions will not be filled.

Looming Crisis Ahead in 2010

While Rybak’s proposed budget minimizes the impact of the State budget crisis on Minneapolis, unfortunately, the hardest work lies ahead.

“Unless significant changes are made by the State, in 2010 we will need to make very tough and very painful cuts that will have an impact on every part of the City,” Rybak said. “Just how painful those cuts are will depend in large part on the economy, and the State, neither of which have been very helpful lately.”

To address the challenges of the 2010 budget, Rybak said that he would be calling on the State Legislature to help on three fronts:

1. Limit local government aid cuts proposed in the Governor’s budget. Minneapolis generates far more revenue for the State than the State returns, and Rybak says that Minneapolis deserves to have its fair share.

2. Free the City to be able to use its own resources. Most of the sales tax collected in Minneapolis goes to the State. The only part the City keeps is dedicated to the convention center. Rybak wants more flexibility to use that small part of the sales tax that stays in Minneapolis for other needs like public safety.

3. Minneapolis needs the State to pass pension reform. Right now the City’s closed Police and Fire retirement funds get all the upsides in good times, but in down times city property payers get the bill. The solution is to merge the City’s three closed pension funds into the statewide plan, where other City employees are. Without needed reform, Minneapolis property taxpayers are being overcharged and that is making it harder for to deliver basic City services.