St. Paul Mayor Melvin Carter proposes property tax increase for 2025

St. Paul Mayor Melvin Carter unveiled his $854.9 million proposed budget for 2025 in a sweeping address Tuesday morning at the Ordway Center for the Performing Arts.

His plan would bump the city's property tax levy to $224.9 million, a 7.9% increase from this year.

The levy is the total amount the city collects in property taxes. It is not automatically adjusted for inflation year to year, Carter noted, adding that about $19 million of the general fund's $25 million increase is needed to maintain the city's current service levels.

Increases to individual property tax bills will vary. Under the proposal, the owner of a $275,300 median-value St. Paul home would owe $1,364 in property taxes next year, up $132 from this year.

Carter's 35-minute speech, delivered to a crowd packed into the Ordway's second-floor atrium, centered around four key issues: public safety, housing, downtown and climate change.

"As challenging as this budget was to construct," the mayor said, "I am confident the numbers clearly convey not only what but who our community cares about."

'All-in' on housing

Carter gave the most airtime to what he's calling his "all-in housing framework," a $7.4 million package of spending proposals and policies aimed at addressing St. Paul's housing crisis.

That includes $2 million for the city's down payment assistance program. The mayor wants to expand St. Paul's Inheritance Fund, which provides forgivable loans from that pool to descendants of Rondo neighborhood residents, to families displaced by the demolition of the West Side Flats in the 1960s.

Carter's proposal also includes $1 million for the city's homeowner rehab loan program, $1 million of support for the homeless and $1 million to waive fees for a pair of office-to-residential conversions.

Additionally, he asked the council to pass policies reinstating tenant protections and permanently exempting new construction from rent control.

"Every key to the future of St. Paul depends on our ability to facilitate and accelerate our housing production goals," the mayor said.

The future of downtown

As downtown St. Paul faces a "pivotal moment," Carter said the city must double down on efforts to revitalize the city's central business district.

He is proposing $275,000 to boost police patrols downtown, $200,000 on a camera system and $265,000 on event planning and promotion, among other things.

Failing to respond to the habitual changes caused by the pandemic could have dire consequences for St. Paul's tax base, the mayor warned.

But he also highlighted bright spots for downtown, including last month's Minnesota Yacht Club music festival, which announced it will return to Harriet Island for three days in 2025.

"People are already choosing downtown St. Paul," Carter said. "We have to create the infrastructure to facilitate the ways they have been telling us, loud and clear, how they want to enjoy it."

Public safety and climate change

Council members applauded the mayor's inclusion of $410,000 to hire more firefighters.

The mayor also wants to continue funding some public safety programs launched in recent years with one-time funding from the federal American Rescue Plan Act and state public safety aid.

New funds from an expanded Xcel Energy franchise fee would support $1.4 million in to address the impacts of climate change. Part of that would go toward efforts to change the city's snow operations.

The City Council has final approval of the budget and in recent years has made adjustments, typically small, to the taxing-and-spending plan. The council sets a maximum levy at the end of September and passes the final budget in December.

"I am really encouraged to see a lot of what our council has been advocating for reflected in this proposal," Council President Mitra Jalali said after the address. "Now I have a lot to dig into."