St. Paul's city council passed a $415 million budget for 2025, with a 5.9% increase to the city's property tax levy after resident outcry led the city council to try for a lower tax increase — over vocal objection from Mayor Melvin Carter.

The tradeoff between limiting property tax increases and funding city services and initiatives led to a sharp divide between Carter and the usually low-key St. Paul City Council after council members called for lower tax rate increases as homeowners said taxes were pushing them out of the city.

"This has a lower levy increase, and I think that's more responsive to the concerns we've been hearing," said Ward 2 Council Member Rebecca Noecker. With property taxes increasing sharply since 2019, "The increases are becoming too much," she said.

Council members Anika Bowie, Saura Jost, Hwa Jeong Kim and Cheniqua Johnson voted for the budget. Ward 6 Council Member Nelsie Yang was not present but said in a letter she supported the budget.

Council President Mitra Jalali was the lone vote against the lower levy, saying it "goes too far." "We can't just have a conversation about cost, we have to have a conversation about value."

Carter initially proposed a 7.9% levy increase, but over the last week he has advocated for a budget with a 6.9% levy increase, a compromise he came to with Jalali and supported by Jost of Ward 3.

The rest of the council supported a levy increase of 5.9%, including a reduction of $1.2 million to police overtime from 2024 and shifting some costs from the general fund to other revenue sources, some of them one-time funds, after hearing from residents who felt their property taxes were becoming unmanageable.

For the owner of a median-value $275,000 St. Paul home, the 5.9% levy increase amounts to an additional $98 per year in city property taxes. Additional increases will come when the school district, Ramsey County and Metropolitan Council pass their budgets.

The compromise proposal would have meant an additional $117 per year, a $19-dollar difference that would have added up to about $2 million citywide.

"I believe it's a poor value proposition," Carter told reporters ahead of the budget vote.

Johnson underlined the similarities between the two budgets: $416 million in similarities, she said, and only $2 million in differences.

"The difference is very nominal," said Kim, the council vice president and Ward 5 representative.

What's in the budget

The fire department and libraries are some of the biggest winners in both versions of the budget. The budget approved Wednesday includes money to hire three additional firefighters.

The budget also funds new library books and other materials and includes $500,000 toward major library projects, including reconstruction of the Hamline-Midway library.

The city's free swimming lessons would continue in both scenarios, and both budgets send $250,000 to the city's racial reparations commission. The city would also spend $150,000 on bicycle infrastructure.

Propping up downtown St. Paul is also a priority in both budgets, with each including funds focused on downtown revitalization. Both budgets also include additional funding for affordable housing, rental assistance and response to homelessness. Both budgets also include funding for residential weatherization and energy efficiency, though the sources are different.

Focus on police department

Most of what the council voted to cut from Carter's proposed budget was in public safety, with the largest reduction in police overtime.

"The actual factual case is the city council's budget centers on cuts to police," Carter told reporters earlier this week.

Reining in overtime at the St. Paul Police Department was a focus of the council's budget discussions all year, Jalali said, with the council looking for the police to keep staffing up so as not to lean so much on overtime.

For the first time in her tenure, Jalali said, the city's budget does not fully fund the department's overtime request, and the budget passed by the council includes a deeper cut of $1.2 million, compared to the $250,000 cut proposed in Carter's compromise proposal.

But the budget keeps $700,000 for police overtime in contingency, to be released if the police department makes regular reports about the use of overtime. With that, the cut to the overtime budget would be only $500,000.

Police overtime has overspent its budgets "to the tune of millions of dollars" in recent years, Noecker said, which has pushed other city departments to make cuts to compensate. She and other council members said they wanted to see police focus on hiring more officers, so the department leans less on overtime and officers can rest and spend time with their families.

As of this week, the St. Paul police department has 67 vacancies, Carter's spokesperson Jennifer Lor said.

Carter termed the savings "accounting gimmicks and one-time tricks."

It's unclear whether he'll veto the budget. "We are reviewing this document, which the city's Office of Financial Services received late last night and have yet to perform our standard due diligence on, and will determine next steps in the coming days," he said in a statement after the vote.

Earlier this week, Carter challenged council members to say how the police and other departments should deal with their proposed budget cuts.

"You've got to be able to say, 'Here's how much we want to spend, and here's what we want the impact to be,'" Carter said.

During the council meeting, Johnson, the Ward 7 council member, alluded to those statements, saying people have used such language to try to discredit women in leadership, especially young women. This is the first budget from St. Paul's new all-women council.

Earlier Wednesday, Minneapolis Mayor Jacob Frey vetoed the budget approved by the Minneapolis City Council on Tuesday.

Staff writer James Walsh contributed to this report.