Ness presents balanced budget, but needs tax increase

The city of Duluth will have a balanced budget in 2010 that won't require any layoffs or major cuts to services, but only if the council approves a tax increase.

Still, the proposed increase isn't nearly as high as the double digit increase passed last year that brought the scorn of Gov. Tim Pawlenty. Duluth Mayor Don Ness will ask the council to approve a 5.4 percent increase in the city's levy, about 3 percent of which would go toward building a new police headquarters. The rest would go toward the city's general operations.

The mayor's budget again calls for the city to tighten its belt, cutting general fund expenses for the second straight year from $77 million to $75 million. If the 2010 budget is passed, operating expenses will have been cut by nearly 7 percent since 2008.

"We looked back over 20 years and haven't seen a multi-year reduction like this," said David Montgomery, the city's Chief Administrative Officer.

Ness blames cuts in Local Government Aid, a slump in sales tax collections and poor investment earnings for the reason to cut back on expenses. He also said that services that needed to be cut last year, such as library hours and park operations, would not be restored.

"There are many things that the public and council would like to see, but given the constraints and cuts in aid, we're not able to implement those increases," he said.

Still, he added that there would not be any controversial property sales to balance the budget, such as last year when the city sold parcels of Park Point land or tried to sell the Minnehaha stained glass window.

Ness said he's attempting a "fundamental shift" in city budgeting, one that sees the city moving from survival mode to strategies for long-term financial stability.

Part of that strategy has been to eliminate services Ness said are not core to the city's mission, such as selling steam boilers to Minnesota Power and having the Lake Superior Zoological Society take over management of the Lake Superior Zoo.

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