City Council’s Budget Season Calls for Cuts

First off, so glad to see many friends at last week’s Holiday Chamber Connect! Thanks to all the vendors who provided fabulous food, and to those who joined us. Which makes me think of the holiday season ahead. This is my last blog for the year, and we’ll pick back up the first week of January. I want to wish you all a blessed holiday season, however you celebrate!  
 
Last week also was an important Saint Paul City Council meeting, marked by critical decisions and significant financial discussions:

1) Rent Stabilization Ordinance:
Mayor Carter’s proposal to amend the city’s rent stabilization ordinance was not adopted, maintaining the current policy amidst concerns about the precipitous drop in new construction permits since the ordinance's inception.
 
2) 2025 Budget Amendments:
The City Council approved an amendment to reduce the levy increase from 7.9% to 5.9%, cutting $4M from the Mayor’s proposed budget. Key adjustments include:

• $1.2M reduction for non-emergency police time, with $700K for police overtime kept in contingency (at the discretion of the City Council.)
• Elimination of funding for 4 staff positions ($562K), including 1 project manager focused on downtown redevelopment.
• Funding for 3 new firefighter positions.

Details of the approved budget can be found here.  
 
3) Future Budget Changes:
The Council also signaled its intent to pursue several operational reforms by 2026, including:

• A city debt capacity study to ensure external entities fully reimburse city costs.
• Transitioning council members from part-time to full-time roles.
• Adopting a two-year budgeting cycle for better planning and evaluation.

 
Context here is key. Saint Paul faces immense financial pressures while also getting in its own way as it relates to at least one critical priority – the need for new housing. The city’s fiscal stress is detailed in a report released in October by the nonpartisan grassroots nonprofit, In$ight St. Paul. This report highlights a worrisome budget trend.
 
These realities highlight two competing truths: the need for fiscal responsibility and the simultaneously urgent necessity to invest in public safety, downtown revitalization, and housing development. Balancing these priorities will be critical for the city's future. To my mind, last week’s City Council reduced the levy increase through reductions in the priorities we need the most. We will continue to track these developments closely while waiting to see if Mayor Carter uses his line item or full veto of the budget. Stay tuned for updates or read the GA Newsletter on Thursday. 

1. St. Paul City Council bucks mayor in passing lower tax increase, The Minnesota Star Tribune 
2. St. Paul City Council rejects mayor’s budget compromise, holds tax levy to 5.9%, Pioneer Press 
3. St. Paul's new-look city council passes budget over mayor's objections, Axios Twin Cities​

See you in the trenches.

B

Be sure to mark your calendars for one of our most anticipated events to kick off the new year: Breakfast With The Mayors. on Jan 21, 2025. Be sure to mark your calendars!

📅 Date: January 21, 2025, 7:15 – 9:00 AM
📍 Where: University of St. Thomas

Register Now