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What You Need To Know About St. Paul’s Budget For 2022

As the St. Paul City Council prepares to vote on the city’s property tax levy this week, here’s what you need to know about the city’s 2022 budget — and the millions of cash the federal American Rescue Plan will bring the city.

Mayor Melvin Carter’s budget proposal for 2022 totals $713 million, an increase of $80 million above the budget council ultimately approved for 2021 and $66 million over what the city spent in 2020.

St. Paul Mayor Melvin Carter recommended a conservative budget last year, one that slashed spending compared to the previous year, amid uncertainties surrounding the COVID-19 epidemic.

This year, he took a different approach, releasing a 2022 budget that increases spending by about 13% while addressing both long-standing challenges and issues aggravated by the pandemic.

“While last year’s budget was about bracing ourselves against the most devastating blows of the global crises swirling all around us, our financial discipline — combined with significant assistance from our federal partners — has quickly returned us to a point of preparedness to imagine and invest in the Saint Paul we are building for the future,” Carter said in his budget address.

Here’s what you need to know about the city’s spending plans — and the millions of dollars heading its way under the federal American Rescue Plan — as the St. Paul Municipal Council prepares to approve a major piece of the city budget this week: the maximum property tax levy.

Carter’s 2022 budget plan tops out at $713 million, an increase of $80 million above the budget council ultimately approved for 2021 and $66 million over what the city spent in 2020.

The proposal includes a 6.9% property tax levy increase, or a monthly increase of $10.58 for a median-value home in St. Paul. In his budget address, Carter said, “This increase reflects the reality of rising prices of everything from labor to construction materials, our expanding citywide tax base, and the expenditures of providing high-quality public services to a quickly growing population.”

Carter’s proposal would reverse staff cuts made during the outbreak and eventually reinstate 115 full-time workers to the city payroll. In reality, the budget would add personnel to practically every local department: the City Attorney’s office would gain 19 new employees, the Fire Department would get 11, and the Human Rights Office would gain four. No city departments’ employment levels would be cut, and the police, emergency management, and technology departments would not receive any new posts.

Carter also proposes that a five-year Capital Improvement Budget plan for city development projects begin in 2022. In the Dayton’s Bluff area, he proposes investing $32.2 million during the first two years of that plan on the Hamline Midway Library, the North End Community Center, and St. Paul Fire Department Station 7.

The most striking new spending plan, according to Carter, is a proposal to spend $1.1 million to establish an Office of Neighborhood Safety, which would promote a “community-first” approach to public safety. The Community-First Public Safety Commission, a 46-member body formed last year in the aftermath of George Floyd’s murder and tasked with reimagining emergency response in St. Paul, came up with the idea for the office.

“Violence prevention strategies and alternative response” would be led by the Office of Neighborhood Safety, which would collaborate with the “Department of Safety and Inspections, Saint Paul Police Department, Saint Paul Fire Department, and other Community-First Public Safety partners,” according to Carter.

With four full-time employees, the agency would conduct research, gather and evaluate data, and establish a permanent neighborhood safety commission.

Priorities of the ARP

Although Carter announced his plans for the money as part of his 2022 budget presentation, the $713 million total does not include money paid to the city under the federal government’s American Rescue Plan. The city of St. Paul will get half of the federal emergency funds in May 2021 and the other half in May 2022, for a total of $166 million.

Carter’s plan devotes the majority of the funds to three major priorities: $40 million for “neighborhood safety strategies,” $40 million for housing, specifically to support services for the unhoused and money for affordable and “deeply affordable” housing, and another $40 million for “jobs and career readiness” so that residents of all ages and abilities “can access and maintain stable employment opportunities with living wages,” according to Carter’s plan.

Carter has also proposed allocating $18 million of ARP to modernizing and automating city services, as well as $15 million to programs that help citizens maintain financial stability.

Carter proposes spending a little less than $12 million of the ARP money in 2022, with the majority of it going toward restoring the overall budget following the pandemic’s losses. This includes $1.7 million for attrition-related police staffing gaps and more than $2 million to restore library and park employees and services that were lost during the health crisis.

Carter’s spending priorities elicited a variety of responses.

St. Paul City Council members spelled forth their own budget priorities before Carter offered his 2022 budget, which included funding for affordable housing, community safety, gun violence prevention, and an infrastructure investment plan.

The magnitude of the tax is one of the most significant discrepancies between the council and the mayor. The council recommended a levy increase of 2 to 4%, which is much less than Carter’s proposed 6.9% rise.

“The 6.9% tax increase is difficult for the folks I represent in Ward 7,” said Council Member Jane Prince. “And it’s difficult to explain when the federal government is giving us $166 million.”

Carter did not propose increasing the city’s maximum number of police officers, and City Council members are mostly in agreement that the department does not need to expand. However, some members of the City Council are concerned that attrition has reduced the number of officers on the force.

“I think everyone recognizes that we can’t continue to stress our police officers by requiring them to go out in smaller numbers, to be on duty where there are so many more guns on the street,” Prince added.

In an unprecedented action for a department leader, St. Paul Police Chief Todd Axtell made a direct plea to Council members on Sept. 1, demanding that they enhance Carter’s $1.7 million plan for rehiring officers to $3.8 million.

The city of St. Paul is allowed to have up to 620 police officers. The department now has roughly 560 employees. Last year, the city held off on investing money to hire new cops to replace officers who quit or retired, which contributed to the drop. Because of the lower officer numbers, there are fewer officers available to respond to 911 calls. As a result, the department has halted most traffic enforcement and shifted its resources to 911 calls.

As a result of the reduced police presence, Shannon Watson, vice president of public affairs for the St. Paul Area Chamber of Commerce, said several St. Paul firms have hired their own private protection. “I’m not an expert,” she explained, “and I’m not here to suggest that this amount of money is good.” “Axtell is an astute individual. He’s been in the industry for quite some time. He’s well-aware of what he’s doing. Part of doing things successfully, in my opinion, is employing clever people, providing them with the resources they need to accomplish their jobs properly, and then supporting them. The best thing the council and mayor can do, in my opinion, is to listen to the chief when he says that’s what we need to do.”

Mitra Jalali, a council member, believes that there are more options for ensuring community safety than simply funding more or fewer cops. “It creates a dilemma because if crime decreases, police are given credit for it and receive more funding,” Jalali explained. “If crime is on the rise, police are seen as the solution and receive additional resources.” It’s an incoherent and ineffective paradigm that isn’t working and is costing millions of dollars.”

Jalali noted that while police spending is important, the city has yet to find a “balance” for public safety financing, while she appreciated Carter’s commitment to establish the Office of Neighborhood Safety.

Members of the council have also advocated for a higher investment in infrastructure maintenance. Jalali said she’d like to see more money set aside for street and sidewalk maintenance, but she also suggested that the city “reduce the load-bearing vehicles” on St. Paul streets, which would require less street maintenance and allow for other types of infrastructure for other modes of transportation. Another infrastructure expenditure that Jalali and Council President Amy Brendmoen favor is funding for tree planting to offer shade and reduce urban heat islands.

ARP money can be used in a variety of ways.

The $166 million in federal funds from the ARP Act presents a once-in-a-lifetime opportunity for the city to make significant investments, and both council members and community leaders expressed excitement at the prospect of using the funds to make long-term, sustainable changes for St. Paul residents.

Brendmoen stated that she would like to use ARP Act funds to narrow the homeownership gap between Black and white inhabitants in the city. She believes the city should prioritize funding for first-time homebuyer programs, as well as programs that assist low-income persons in becoming landlords.

Brendmoen has stated that she wants to prevent potential displacement by providing chances for persons who are at risk of being displaced from their homes. She favors not only a down payment help program, but also training programs that educate potential homebuyers prior to making a purchase, she said.

Carter’s push to put $40 million toward housing was also praised by Jalali, who added that “huge buckets” of expenditure on public safety are also encouraging. She also stated that while she is open to hearing about various methods to spend money on public safety, she is less interested in hearing suggestions that would give more money to the police to spend on programs that “do most of the same things over the last several years.”

“What public safety are we talking about?” Jalili asked, “but I’m open and working on it.”

“How can we ensure that these resources actually flow into our least invested-in residents and neighborhoods?” asks Jalali about using ARP funds. She claimed it was for individuals who were in a “continuous state of everyday emergency of poverty and housing insecurity,” not merely to respond to COVID-19’s damages.

The levy cap will be discussed by the council on Wednesday. The levy must be completed by September 30 in order for the city to send out a notice to residents. In October, members of the City Council conduct a thorough review of the budget before debating and making any adjustments. The vote to finalize the budget for 2022 is scheduled for Dec. 8.

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