Ongoing pandemic forces Saint Paul to seek cuts in all departments

By Jane McClure

Saint Paul leaders are in the unusual position of having to consider cuts to the 2020 city budget while also preparing financing and spending plans for next year. Mayor Melvin Carter must present his 2021 budget to the City Council by August 15. He said the process has been difficult and he does not expect the results to be popular.

“I fully anticipate bringing forward a 2021 budget that none of us would like,” Carter said. “I’m not going to like it.”

Saint Paul is projecting a total deficit of between $19 million and $34 million for 2020. The city is not only dealing with a loss of revenue due to COVID-19, but has incurred pandemic-related and other costs due to riots in late May. Juggling those expenses as well as ongoing changes to city services caused by the pandemic means that it is not business as usual at City Hall.

   

“I fully anticipate bringing forward a 2021 budget that none of us would like,” Carter said. “I’m not going to like it.”

“While the mayor has yet to make final decisions about the budget he’ll propose to the City Council, the realities of a global economic crisis are likely to require reductions in every city department,” said city communications director Peter Leggett. “We’re considering every option to avoid adding a large property tax increase to the challenges our residents are currently facing.”

Given the economic hardships created by the pandemic, Carter said it is not an appropriate time to bring forward a “significant” property tax increase. The city has received $23.5 million in CARES Act funding from the state, but those funds can only be used to pay pandemic-related expenses, not offset the loss of general fund revenue.

 

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With declining earnings and increased expenses, Carter said the city has no choice but to cut spending. The city is seeing a drop in sales taxes, business license fees, property taxes and other revenue.

One example of the pandemic’s impact on the city budget is parking-related income. The city has seen a drop in 2020 of more than $1.3 million from city-owned parking spaces and $760,000 from parking meters.

All city departments were asked earlier this year to not fill staff vacancies and to scrutinize expenses to see what could be deferred. Now they have been asked to make plans to cut their spending by 6-7 percent for 2021.

For the Saint Paul Police Department, the cuts could mean slashing $9.2 million from its 2021 budget. This year’s police budget is $105 million. In an email to employees, Police Chief Todd Axtell said that level of spending reduction will mean cuts “at all ranks.”

“I know this is a hit to our collective soul, especially given the crime trends we’re seeing, the ever-increasing calls for service and the needs of the city,” Axtell wrote. “I shared with the mayor my disappointment and urged him to reconsider.”

Carter said he understands Axtell’s frustration, but that every department is making cuts. “Frankly, we’re worried about
everything,” he said. “There are so many question marks.”

The mayor would not speculate on whether the city would be forced to shut down such facilities as recreation centers or libraries.

Some council members said the budget challenges provide an opportunity to reshape city government, possibly by merging some functions and making other operational changes.

Jane Prince has been the most vocal council member in calling for discussions of 2020 spending and potential cuts for 2021. She is concerned that the Police Department will have to cut many of its innovative approaches to policing, including its community engagement unit. She also is concerned that cutting police positions on a first-hired, first-fired fashion would potentially mean losing women and officers of color.

Another change the mayor is preparing for is that of public engagement during the budget process. The pandemic is likely to force the city’s first-ever online budget address.

“We anticipate significant virtual outreach,” Carter said.

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