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The arguments for investing in early childhood are compelling, but this St. Paul property tax is not the solution – Twin Cities
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The arguments for investing in early childhood are compelling, but this St. Paul property tax is not the solution – Twin Cities

In the November election, St. Paul voters face a crucial decision: whether to approve a mandatory property tax increase over the next 10 years to fund early childhood care and education initiatives. While I believe the goal of this ballot measure is laudable, its implementation raises serious concerns regarding the prioritization of pressing municipal issues and fiscal responsibility.

As part of my own due diligence, I spent a lot of time studying the initiative. The importance of this issue deserves serious consideration. I heard the City Council presentation in September of this year; I read the 48 page report summarize the plan and review summaries of both the need and proposed financial projections; we invited Councilman Noecker (the plan sponsor) to present the program at our Public Affairs Forum; I spoke with Art Rolnick, whose professional work in the area of ​​economics and early childhood development (and his support of this program) is well known and respected. I agree that investing in our children is essential for our future. And at the same time, I cannot support the proposed program.

At the center of this proposal is a commitment to collect $2 million in property taxes in the first year, increasing by $2 million each subsequent year until $20 million collected in the tenth year. My understanding is that cost estimates for managing this initiative could far exceed last year’s revenue. And then what?

Prioritization

I must agree with mayor carter by not supporting this electoral measure.

Mayor Carter vetoed the ballot measure in July 2023 (the City Council later overrode that veto) due to his own concerns: one of them was that no office or department in St. Paul could “reasonably and effectively absorb this set of job”.

He estimated it would cost millions of dollars just to build the infrastructure. He has been clear that there will not be enough money raised to administer this program. And the City lacks the government structure and capacity to assume this new mandate.

At the September 2024 City Council meeting, Council President Jalali said she was “very concerned about the City playing a larger role in taking this on.” He went on to say: “Our role should be to support other agencies and providers to access the funding they need.”

Fiscal responsibility

It is absolutely necessary to consider the context. This is possibly the worst time to contemplate another tax increase.

St. Paul faces extraordinary challenges in the current fiscal climate of rising tax increases and a shrinking tax base. This would be in addition to a proposed 7.9% citywide tax increase by 2025, a 4.75% increase in Ramsey County, a new metro-wide sales tax, and a new sales tax. 1% sales in St. Paul. Adding more financial pressure on residents and businesses to fund a program that lacks a solid long-term plan only compounds the city’s already precarious budget situation.

Additionally, as the City of Saint Paul faces a $19.4 million inflationary challenge, similar to a 10% increase in property taxes, there is growing concern about the sustainability of further tax increases.

The city’s main sources of income are commercial properties. And this sector is challenged. Many city center buildings are experiencing a loss in value. Look at the Saint Paul Athletic Club, for example, which recently failed to sell at auction with an asking price lower than what it cost to build in 1915. Or the River Park Plaza, whose assessed property value plummeted 42.3% this year. anus.

This trend threatens to further erode the tax base, and there has been no study or discussion of how this decline in commercial property values ​​and its impact on the City’s budget will affect the increases required to fund this proposed program.

Compelling data, but not this way

I must say that the data supporting investing in our children is compelling.

The Legislature agreed last year and authorized funding for an expanded child care plan. That said, addressing early childhood care and education is a larger task than any individual city can manage or fund through its property tax. And the City of Saint Paul is already stretched thin with its funding and meeting its immediate responsibilities: infrastructure improvements, ensuring public safety, serving the underserved, improving its existing parks and recreational resources, and revitalizing commercial areas.

Given the above considerations, I believe it is financially irresponsible to support the program as presented. Voters in St. Paul should carefully consider the implications of approving an automatic 10-year property tax increase, given a very uncertain fiscal climate in our immediate future.

I urge you to vote “no” on question 1.

B Kyle is president and CEO of the St. Paul Area Chamber.