In St. Paul, property owners are about to feel the combined effects of sluggish downtown property values, limited economic development growth and cuts in federal funding.
Calling his new budget proposal the hardest he’s had to prepare in his eight years in office, Mayor Melvin Carter unveiled a no-frills budget plan for 2026 that expands investment in housing programs such as office-to-housing conversions and downpayment assistance while avoiding layoffs of city employees.
To accomplish those goals, the mayor’s proposal freezes hiring for dozens of open positions, shifting funding from vacancies to sustain existing city workers. The $887 million budget plan for the coming year would rely on a 5.3% property tax levy increase, roughly comparable to this year’s tax levy increase of 5.9% and about average for the past decade. The total levy would be $232.5 million, supporting a general fund budget of $404.9 million.
That increase comes on the heels of some difficult news for taxpayers. The Ramsey County Board of Commissioners unveiled a tax levy increase request this week of 9.75%, and the St. Paul Public Schools are asking voters to approve a 10-year, $37.2-million-per-year levy referendum that would raise property taxes by another $309 for a median-value home in St. Paul.
Taken together, many property owners could be in for some sticker shock, and city department leaders are likely to raise objections to the city council over important positions that will go unfilled, the mayor acknowledged. “This isn’t a year for us to pursue fun stuff or pet projects,” Carter said in an interview this week. “We’re going to really focus on public safety, housing and downtown.”
Carter, who was scheduled to give his budget presentation at Allianz Field on Thursday morning, said the city is navigating an array of pressures, from uncertainty at the federal level to the ongoing work of recovering from a cyber attack likely to cost the city well over $1 million in overtime and consultant fees, as well as fiscal challenges buffeting urban areas nationwide, ranging from the impacts of inflation to remote work.
Housing programs
The mayor’s budget proposal calls for sustaining key investments in housing programs that have rolled out over the past few years, and in some cases, expanding them.
With the goal of encouraging affordable housing, the city has long allowed residents to convert garages and other modest spaces into small housing units known as accessory dwelling units, but takers have been few. “We allow them, but we haven’t seen the growth in them we’d like,” Carter said.
To streamline “ADU” development, the city’s planning department will create a menu of pre-approved design plans that homeowners can choose from.
The Department of Safety and Inspections plans to sunset outdated, paper-heavy information platforms such as Amanda, STAMP and Eclipse and replace them with PAULIE, which will offer residents opportunity to submit permit applications and permit fees online, as well as look up records from home at all hours.
“You can’t apply for a single business license online right now,” said DSI director Angie Wiese, in an interview.
PAULIE, which is backed by $600,000 in the mayor’s budget proposal, is expected to jumpstart a related initiative — remote virtual inspections — aimed at allowing property inspections through a property owner’s smartphone. Both efforts are aimed at streamlining processes that can slow down housing development.
Other housing investments include:
• $5 million to fund the city’s office-to-housing conversion program, which seeks to incentivize the conversion of outdated office businesses into new residences. The program would support gap financing and permit fee waivers.
• A housing down payment assistance program would double in size, growing from $1 million to $2 million in annual city funding.
• Another $1 million would fund the city’s Inheritance Fund, which aims to support homebuying for direct descendants of residents displaced by the construction of Interstate 94 through the Rondo neighborhood and residents displaced from the West Side Flats.
• $1 million will continue the work of the city’s emergency rental assistance program.
Despite a difficult era for downtown, where several buildings have fallen into foreclosure or been put up for sale for as little as $1, St. Paul is on the cusp of a wave of new housing at Highland Bridge, The Heights and elsewhere throughout the city, Carter noted, pointing to the example of a Chicago firm that has purchased four residential buildings downtown.
Safety and community well-being
Using public safety aid from the state, the mayor said the city will continue to promote initiatives that address gun violence, add EMS staff to the St. Paul Fire Department and expand community outreach through the city’s Office of Neighborhood Safety. Also underway is a gun diversion program through the city attorney’s office.
The mayor’s budget includes $1 million as a one-time investment to expand citywide prevention, treatment and response to the opioid and fentanyl crisis.
Carter said the work of two ambulance units — providing Advanced Life Support and Basic Life Support — has helped shave response times in the city by a minute, which can be critical. Still, the BLS unit, which responds to minor medical calls such as sprained ankles, isn’t in much use overnight, said the mayor, who is looking to end its overnight services and while keeping it active during the day.
Another $175,000 will be cut from the city’s EMS Academy, a training program that will have to look to other resources, including outside funding such as foundation grants. The city’s two-person CARES unit, composed of two EMS workers from the St. Paul Fire Department who respond to mental health crises, would be folded into the existing BLS unit. “It won’t exist anymore as a stand-alone team,” the mayor said.
In the areas of community and economic development, the mayor’s budget proposal includes $1 million as a one-time investment in a Commercial Corridors Fund to support the city’s business districts, and $200,000 as a one-time funding increase to support the city’s District Councils.
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