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

As part of my own due diligence, I spent a lot of time researching the initiative. The importance of this subject deserves serious reflection. I listened to the city council’s presentation in September of this year; I read the 48 page report summarize the plan and review the needs overviews and proposed financial projections; we invited Council Member Noecker (the plan sponsor) to present the program at our Public Affairs Forum; I spoke with Art Rolnick, whose professional work in economics and early childhood development (and his support of this program) is well known and respected. I recognize that investing in our children is essential to our future. And at the same time, I cannot support the proposed program.

At the heart of this proposal is a commitment to levy $2 million in property taxes in the first year, increasing by $2 million each subsequent year until reaching $20 million in the tenth year. From what I understand, the estimated costs to administer this initiative could far exceed last year’s revenue. And then what?

Prioritization

I have to agree with Mayor Carter by not supporting this ballot measure.

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

He estimated that just building the infrastructure would cost millions of dollars. He made it clear that there would not be enough money to administer this program. And the City does not have the government structure or capacity necessary to assume this new mandate.

At the September 2024 City Council meeting, Council President Jalali expressed that she was “very concerned about the city taking a larger role in addressing this issue.” She added: “Our role should be to help other agencies and providers access the funds they need. »

Tax liability

It is absolutely necessary to take the context into account. This may be the worst time to consider another tax increase.

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

Additionally, as the City of Saint Paul faces a $19.4 million inflation challenge, equivalent to a 10% increase in property taxes, concerns grow about the sustainability of further tax increases .

The city’s main sources of revenue are commercial properties. And this sector is challenged. Many downtown buildings are experiencing a decline in value. Look at the Saint Paul Athletic Club, for example, which recently failed to sell at auction with a lower starting price than when it was built in 1915. Or the River Park Plaza, which has seen its property values ​​plummet by 42.3% this year.

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 that way

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

The Legislature agreed last year and authorized funding for an expanded child care plan. That said, supporting early childhood care and education is beyond what an individual city can administer or fund through its property tax levy. And the City of Saint Paul is already facing challenges in financing and carrying out its immediate responsibilities: improving infrastructure, ensuring public safety, serving people experiencing homelessness, 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. St. Paul voters should carefully consider the implications of approving an automatic 10-year property tax increase, given the highly uncertain fiscal climate in our immediate future.

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

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