Random thoughts on the Eden Prairie budget

I read in the local papers that the City has established a preliminary levy for 2012. This levy will modestly increase taxes, slightly more significantly increase spending, and establish certain new "fees" for residents to pay. A few thoughts given my recent history with city finance.

When cities talk about their budgets they prefer to speak only about levy increases--the amount of taxes that they will raise. This is an important point---don't get me wrong. But, it minimizes what citizens should really be concerned about--total spending.  Usually, spending will increase in a greater amount (and percent) than taxes. The reason for this is simple--fees and other non-tax revenue.  Cities will generate about 30% of their revenue from sources other than property taxes.  But, they rarely talk about this. Their primary talking point remains the levy, and that can be misleading.

Take this year, for example. The levy is forecast to rise by about 1%. But, total spending will increase by more than 3%, not including new "fees."  Sure, none of those numbers is huge. But, in a time in which economists fear a double dip recession and private sector unemployment remains high, maybe the city could tighten its belt a little more. I don't know many people who're making more money today than they did four years ago. But, city employees have enjoyed an increase in every year but one.  Whether money is generated by taxes or by fees it belongs to the people; and all people should be concerned with how much money the city intends to spend.

And, the city is toying with the idea of new "fees" to fund the capital improvement fund. Bad idea.  A "fee" is worse than an increase in property tax. At least property tax is deductible on your income tax return; a fee isn't. 

And, I still believe that government shouldn't pay "hide the ball"--if city leaders want to raise revenue they should raise taxes and tell people why. Don't start inventing unnecessary fees just so that you can claim that you're not raising taxes by that much.

And, if the city really needs money for its capital improvement fund it could start making some hard choices--for example, selling some of the unnecessary land that it owns.  The city bought land six years ago to build a fire station and has been trying to sell a remnant parcel to "the right buyer" ever since. Maybe if the city really needs more money it should do what a private landowner in need of cash would do--cut the price, get less picky on who the "right buyer" is and sell that piece of land.