Stuck on Stupid

Residents of Minneapolis are looking at a property tax increase approaching 20% next year.

The proposed tax increase is the city’s response to growing pension obligations, cuts to Local Government Aid (LGA) and recertification of Tax Increment Financing (TIF) districts that fund neighborhoods and pay Target Center debt. The hike is based on a 7.5-percent, $20 million levy increase, which translates to an actual tax increase of roughly 10 percent to 20 percent for most Minneapolis property owners.

As much a the Mayor and the City Council want to blame the State Legislature for not providing enough aid (LGA), this problem is the product of years of poor fiscal management.

The City gave granted defined-benefit pensions to police and firefighters while most of the the non-government world had only defined-contribution retirement plans. This decision put taxpayers on the hook for guaranteed payments without regard to economic risks and realities.

Compounding the stupidity, the City gave control of management of the retirement funds to the worker unions. That allowed the portfolio managers to speculate toward higher returns. In the years when the gambles went well, the retirees got a bonus. When the markets dropped, the retirees still got their payments and Minneapolis property owners made up the difference.

Instead of cataloging more of the the City’s past foolishness, I call your attention to this story, running at the same time as the tax hike:

On Nov. 19, the Minneapolis City Council approved Oslund’s landscape architecture firm, Oslund and Associates, to spearhead the $6 million renovation of Peavey Plaza.

Peavy Plaza is a landmark park in downtown Minneapolis:

When Peavey originally opened in 1975, wowing Downtowners with M. Paul Friedberg’s modernist design of blocky, concrete terraces cascading into a sunken pool, it was a pedestrian magnet, teeming constantly with people and frequently hosting public events. It also put Minneapolis on the map as a capital for vanguard landscape architecture. But 35 years later, the space is shopworn, visibly showing signs of decay.

It’s just a bunch of stone terraces. It looks fine to me, and it is still completely usable. It may want renovation, but it doesn’t need renovation.

Cancel, or at least postpone, this handout to the architect-and-planning community and we offset about one third of the property tax increase. After all, isn’t the City government supposed to serve its residents before suburbanites and tourists who use Peavey Plaza?

While the Mayor and Council complain that they face tough decisions because of past and outside choices, they’re happy to keep pulling the stupid lever themselves.