In budget address next week St. Paul mayor to focus on spending priorities as city faces post-pandemic challenges

Frederick Melo, Pioneer Press
·4 min read
In budget address next week St. Paul mayor to focus on spending priorities as city faces post-pandemic challenges

St. Paul Mayor Melvin Carter will unveil key spending priorities, as well as a proposed property tax levy, during his 2024 budget address next Thursday at a real estate development site that’s become symbol of both the capital city’s promise and challenges.

Hailed as a mixed-income, environmentally-sustainable rethinking of former Ford Motor Co. factory land, the Highland Bridge development has drawn well-heeled seniors to market-rate housing within walking distance of the Mississippi River, even as low-income apartments are built next door.

A man-made water feature curves like a river walk under pedestrian bridges, bordering a new skate park, dog walk and multiple playgrounds. It’s a majestic site, with a new Lunds grocery store anchoring a corner along Ford Parkway, and yet a visible slowdown in apartment construction has created a palpable obstacle for both Highland Bridge and the city as a whole.

With key exceptions such as a series of sizable apartment buildings underway near Plato Boulevard, as well as pending demolition at the Heights — the former Hillcrest Country Club — there’s few construction cranes in the capital city.

Given the degree to which retail has fled online and office buildings are running increasingly short on tenants in the era of remote work, it’s hard to grow the city’s tax base if new apartment buildings aren’t built in St. Paul. And without a growing tax base, covering the rising costs of city labor and everyday street, parks and building maintenance threaten to place more and more pressure on city property and sales taxes.

The city’s property tax levy increased some 14 percent this year, following legal decisions that forced the mayor’s office to move basic street and alley maintenance from a fee-based assessment system over to the property tax-backed general fund.

“The one uniform thing council members are saying is let’s keep (the property tax levy) as low as we can, especially given the state legislature’s shifts,” said Council President Amy Brendmoen on Thursday. “I think he’s agreed.”

A rare funding windfall

Brendmoen noted that the past legislative session — controlled by the Democratic-Farmer-Labor party in both houses, as well as the governor’s office — freed up no small amount of funding for St. Paul through increased state legislative aid, as well as some one-time public safety grants, the state bonding bill, a state historic tax credit program and other dollars.

State funds will soon move forward the Kellogg Boulevard/Third Street bridge reconstruction, the Heights development, the Mississippi River Learning Center in Highland Park and the North End Community Center.

In November, St. Paul voters will decide whether to increase the city portion of the local sales tax by a percentage point to raise nearly $1 billion over 20 years, mostly for arterial road reconstruction. A fourth of the funding would be dedicated to parks improvements.

It’s no small ask for needs that are obvious. After a brutal spring thaw, some St. Paul streets were left pock-marked. Ideally, city streets would be reconstructed every 60 years, but limited state funding and decades of deferred maintenance have limited the city to a 124-year road replacement cycle that imperils the city’s economy.

A St. Paul visitor or resident already pays about 8 cents on every dollar for most purchases other than clothing and groceries in St. Paul. That includes 6.875 percent, or nearly 7 cents, collected by the state, on top of a half-penny dedicated to Ramsey County’s transit funding and a half-penny dedicated to the city for neighborhood improvements — mostly through STAR loans and grants — and to pay off the bonds related to the construction of the Xcel Energy Center.

Those numbers will soon go up another penny, from 7.875 percent to 8.875 percent, as a result of new regional transit and housing funds approved by the state Legislature on a metro-wide basis. If Carter’s penny increase is approved, the city will have a 9.875 percent sales tax — the most expensive in the state, other than some downtown entertainment districts.

Budget address Thursday

Carter will deliver his 2024 budget proposal — the sixth budget address of his mayoral career — at 10 a.m. Thursday in the civic plaza within Highland Bridge, 2270 Bohland Ave. The address will be live-streamed on the city’s Facebook.com/cityofsaintpaul.

Budget materials will be posted online at budget.stpaul.gov. The mayor’s library budget address will be delivered the same day at 12:30 p.m. at the Highland Park Library, 1974 Ford Parkway.

Following their own discussions with city departments leaders, the St. Paul City Council will have until Dec. 13 to seek changes to the mayor’s budget proposal. The council’s scheduled budget meetings are posted online at stpaul.gov/councilbudgeting.

They begin Aug. 16 with a budget overview, followed by a discussion with the city’s Department of Safety and Inspections. Discussions with St. Paul Public Works, the Fire Department and Library Board are scheduled for Sept. 6. The St. Paul Police Department and Emergency Management will meet with the council a week later.

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