Ramsey County District Court Judge Robert Awsumb ruled on May 2 that the city of Saint Paul may no longer charge property owners a separate fee for routine street maintenance. The decision could blow a hole of $18 million or more in the city’s annual budget, but it comes as a relief to local property owners who were facing assessments of several thousands of dollars for the regular upkeep of streets in front of or beside their homes.
Awsumb’s ruling addresses two cases that he heard in March. One was filed by First Baptist Church in downtown and a group of Saint Paul businesses. The other was filed by Summit Hill residents Christina Anderson and Simon Taghioff. However, dozens of religious institutions, businesses and individual property owners have joined in the lawsuits over the years.
The street maintenance assessments affected by the ruling are all that remain from a larger set of assessments the city charged for a wide array of street maintenance services. The assessment program was created in 2002 by then-Mayor Randy Kelly as a way to get the city’s many tax-exempt nonprofit property owners to help pay for street maintenance. At one point, the right-of-way maintenance assessments covered 27 different city services related to streets and boulevards.
“Raising money to pay for regularly scheduled maintenance that benefits the entire city equally is a function that falls under the (city’s) tax powers,” Judge Awsumb wrote.
In 2016 a lawsuit brought by Saint Paul property owners made it all of the way to the state Supreme Court, which ruled against the assessments. In response, city officials narrowed the assessment program to cover the costs of street sweeping, street lighting, sealcoating and mill and overlay work. To make up for the more than $20 million in street maintenance services that could no longer be covered by the assessments, the city increased the property tax levy by 20 percent.
In his ruling, Awsumb said the remaining street maintenance services do not confer a special benefit on property owners and thus there is no legal basis for assessing for those services.
The plaintiffs had contended that the assessments constituted a “non-uniform tax” and Awsumb agreed. “Case law has held that non-uniform taxes, unlike fees charged under a municipality’s police powers, require a showing of special benefit to the properties charged,” he wrote.
The city argued that it could assess for street maintenance services under a law passed by the state Legislature in 1967. That “special law” allows Saint Paul to charge fees for certain services and that no special benefit must be demonstrated, the city maintained.
Awsumb disagreed. “Raising money to pay for regularly scheduled maintenance that benefits the entire city equally is a function that falls under the (city’s) tax powers,” he wrote.
Anderson and Taghioff live on a corner lot and, according to Taghioff, the couple were shocked to get an assessment of almost $5,000 for mill and overlay work that took place in 2018 on Victoria Street, an arterial street that runs along the 150 feet of boulevard on the side of their home.
“It was just a staggering cost,” Taghioff said. “It’s obviously so egregious.”
On a winter day, he and Anderson bundled up their small child in a stroller and spent a day fliering the neighborhood and discussing the street maintenance assessments with local homeowners. The effort uncovered many property owners around the city with similarly high assessments. Taghioff said he was especially impressed by a 96-year-old Stryker Avenue resident who had been assessed $2,300 for mill and overlay work.
Many people who live on arterial streets have low incomes and are struggling with the high mill and overlay bills, Taghioff said. “There’s a ton of hardship when this is how you pay for street maintenance,” he said.
Plaintiffs’ attorneys Ben Loetscher and Ferdinand Peters worked on the case along with attorney Jack Hoeschler. “We’re satisfied with the ruling, but we know there could be further legal action,” said Loetscher, referring to a possible appeal by the city.
Kamal Baker, a spokesman for Saint Paul Mayor Melvin Carter, said the city is still reviewing the ruling and has not decided whether to appeal to a higher court.
“We have received the ruling and are working to determine the best path forward,” said Peter Leggett, Carter’s chief of staff.
— Jane McClure
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