Minneapolis Taxes Subsidize Minneapolis’ Daily Visitors

Here’s an interesting perspective from Connie Becker on how people can both complain about the City of Minneapolis’ taxes while living in neighboring suburbs. It’s quite the deal: benefits without the cost.

Over 100,000 people work in our city, using our police and fire and roads, yet don’t pay for this. We house the majority of the region’s poor, as suburbs refuse to build low income housing. I pay for the Target Center, baseball stadium and Convention Center where most of the state pays nothing. I pay for regional parks and pay again for state parks. I pay for new suburban infrastructure through my sewer, electric and telephone charges.

Carrying these burdens used to not bother me because the state was a financial partner with the City through Local Government Aid. But now, LGA is evaporating. Minneapolis residents are paying more and more of the cost of these state-wide benefits. At the same time, suburbanites chortle about how high our taxes are and how costly our government is. The real question is not about governance. The real question is how much more burden the state will push off onto Minneapolis residents. Because there is only so much we can carry for our state.

It’s great that suburbanites enjoy Minneapolis. Yet, it would be nice if we could work together to reduce the number of car lanes we need to get people in/out of the city, create less emissions that residents along major traffic corridors have to breath, and build something more interesting than parking ramps and surface lots and downtown.

7 thoughts on “Minneapolis Taxes Subsidize Minneapolis’ Daily Visitors”

  1. Too bad we can’t create IPASS lanes for Govt Services. I think people would feel differently about taxes if they weren’t able to access the things which their taxes pay for.

  2. While anecdotally, what she’s saying would appear to be true.. I’d be curious to see some real data backing this up.

    How many city workers are not residents?
    How many city residents work in suburbs? Is it enough to cancel out what she’s talking about?
    How many city workers live in suburban Hennepin County – paying taxes to the county which provides social services to many city residents?

    The convention tax and Target Center taxes are on sales in the downtown area, correct? I presume many of the suburban workers are paying those taxes.

    It’s certainly possible that Connie Becker’s argument is correct. But I’d like to see data that backs up her anecdotal argument that city residents are carrying the burden for out-of-city people, just because LGA is evaporating.

    (I live in Maple Grove – a city which receives no LGA – so am I carrying the burden for Minneapolis and St. Paul? Perhaps – but without vibrant cities, the suburbs become irrelevant.)

  3. Along with what Jason is saying, Minneapolis provides virtually no services to the poor. Hennepin County and non-profits provide almost all the social work type services to the poor and Hennepin County provides all the welfare services to the poor. Additionally, a large percentage of Hennepin County social services recipients do live in the suburbs. It is often easier to find an affordable apartment in Brooklyn Park, Brooklyn Center, Richfield, etc than it is in a neighborhood in Minneapolis.

    Additionally, we get funding for some of our roads from both County and State sources that are not LGA. While Pleasant Ave might not get those dollars, the ones being used by suburbanites, like 94 and Hennepin, do.

    Additionally, all those business that people come in to the city for pay property taxes. Places like St. Louis Park don’t have huge urban cores with buildings worth millions that they are able to levy property taxes on.

    I’m not going to disagree that we Minneapolis residents don’t get a large burden place on us, because we do. It is very clear that my taxes are more than my parents’ who live in Champlin. Additionally, stuff costs more here. But, I have a lot of added benefits that my parents don’t have that make it worth it for me. I think when we go on rants like above, we need to see the bigger picture.

  4. @Jason, I don’t know if there’s a Good Question or Reality Check in this, but it’s interesting to get a feel for how the money flows.

    As someone who lives in the City of Minneapolis, I know that I pay more in taxes relative to people living outside of the city. And I pay more per sq ft for my home. To me, the costs are worth it.

    The city benefits in a ton of ways from people like you coming in for work, dining, & entertainment. How many of Minneapolis’ excellent restaurants could survive on business from just city residents?

    I believe you’re correct on convention and Target Center taxes. And, living in Maple Grove, you’re paying the Hennepin County taxes for the Twins stadium.

    LGA-wise, I have a hunch (haven’t found numbers to support it yet) that Minneapolis and St. Paul put more in than they get back (state sales & income taxes returned at LGA). My hunch is based on the fact that Annette Meeks, Tony Sutton, Tom Emmer, and Pat Awada never seem to mention the sources of the revenue they’re trying to cut while they’re working to cut LGA from Minneapolis and St. Paul. If the argument could be made that Minneapolis and St. Paul were getting back more than they were putting in, it seems like they’d surely use that argument rather than only talk about the LGA distributions without mentioning the sources of the state income.

  5. @Kassie, I think the role of LGA has morphed since it was the Minnesota Miracle, but how does that change who’s putting the money in vs. who’s getting it out?

    The property tax situation in Minneapolis is interesting due to some decisions to not tax some valuable pieces of land, like the Target Center, so increases in property taxes fall to the rest of us.

    Regarding LGA cuts, Annette Meeks’ Kill LGA editorial in the Strib last year had some interesting comments, including the one I’ve quoted below. I think it gets at what she, Emmer, and Pawlenty are trying to do with Minneapolis’ money:

    is your argument that the state shouldn’t take this money as state taxes in the first place? or are you saying that the rate of taxation is fine the way it is and that local governments just need to do without the money; that the money belongs to the state? there are legitimate reasons to gut/change LGA, but your arguments are myopic and depend on the assumption that LGA money is wasted after being returned to the local governments. the likely reality is that the taxes in every locality receiving LGA will go up sharply, these cities will still cut out many services AND STATE TAX BILLS WILL STAY THE SAME.

  6. I would assume that Minneapolis and St. Paul are putting more in to LGA than they get it… but so am I! Maple Grove gets zippo. And Kassie’s point about St. Louis Park is a great one too.

    Anyway, I like Ed’s comment that he knows he pays more than people in Champlin, but he also gets a lot more. I think that’s true. And he needs to get more: he needs more police protection, more fire response, etc.

    I used to live in Milwaukee, where property taxes were astronomical. That’s just how Wisconsin was set up – lower income tax; cities raise the money they need; people can choose where to live. That worked – because Milwaukee is a huge city, with smaller suburbs.

    This area seems to function more like a region – and I think that having the state collect and redistribute to local governments has some merit. But the argument that the city is getting screwed so the suburbanites can come enjoy the free roads and police service seems crazy to me.

    (To Kassie’s point about low-income housing: I have a truly lovely Section 8 townhome-style apartment complex up the street from me in Maple Grove.)

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