(The Center Square) – Minneapolis Mayor Jacob Frey gave his preliminary 2021 budget address Friday, in which he suggested how the city could improve its finances after restrictions put in place to slow the COVID-19 pandemic battered tax revenue.
Fifty-five percent of the city’s ongoing general fund revenue is gathered from sources other than property taxes, Frey said, sources he added that are projected to drop next year by $32.5 million.
The only solutions are service cuts or property taxes increases, both of which Frey's plan recommends the city pursue.
Frey said only using property taxes to cover the revenue drop would require a 15-percent property tax increase that is “not an option.”
Rioters damaged nearly 1,500 Twin City businesses after the May 25 death of George Floyd in police custody.
Frey proposed several solutions to climb out of the revenue hole, including a state hiring freeze through 2021 that would count an expected departure of 100 Minneapolis police officers by the end of 2020.
“As officers from past generations leave, it’s incumbent on us to ensure that officers of future generations enter the department committed to our shared vision,” Frey said.
He plans to reinstate a diverse class of 28 Community Service Officers.
"Let's equip the most forward-looking police chief in the nation with the support he needs to remake the department of and for the community," Frey said.
"Let's bring more people in and empower community leaders to help us disrupt cycles of violence. With the world watching, let's define a shared framework for progress and honor George Floyd by making real and enduring change."
Frey said he’s asked city department heads to reorganize to deliver core city services and scale back programming dollars.
“Some of those changes, many already underway, can and will happen immediately, and others will take time,” Frey said. “But I firmly believe we must work smarter to do more with less.”
Frey plans to reduce the city’s workforce by offering voluntary retirement programs for older workers to save on payroll costs in the long run and retain a more diverse workforce.
Frey proposed $2.5 million for the Office of Violence Prevention to implement a new violence interruption initiative using neighborhood teams at peak hours from 8 p.m. to 2 a.m.
City voters won’t decide whether to dismantle the Minneapolis Police Department this year, but Frey said he plans to pursue a proposal to shift crime-report-only calls to the city's 311 department.
Frey's budget calls for a maximum of 5.7 percent property tax increase.
The city has already bridged a $156 million gap using furloughs, cash reserves, and a spending freeze.
Minneapolis will have a more detailed proposal by the end of September and is subject to change by City Council members.
Frey recommended a budget with about $1.1 billion in expenditures and $1.4 billion in revenue, with projected revenues just lower than the $1.42 billion in revenue in the 2020 budget the City Council later adopted after COVID-19 dropped tax revenue.
"COVID is impacting all of us, and all of us can do our part to make it better," Frey said. "But we still need a matching commitment in the form of economic aid from our state and federal partners."