Minneapolis Council Committee Approves $58 Million in Phase I Budget Cuts

On Thursday, the Minneapolis City Council’s POGO Committee took the first step towards closing a projected $156 million budget shortfall by approving $58 million in cuts across all city departments. A final vote will happen at next Friday’s City Council meeting. To put the cuts in context, the city’s total budget for 2020 was approved last December at $1.6 billion.

2020 Budget – City of Minneapolis

Budget director Micah Intermill laid out the several budget challenges facing the city simultaneously: tax, parking, utility, and other revenue loss as a result of the pandemic and accompanying recession; costs incurred by the city’s response to the public health emergency; and costs associated with civil unrest following the murder of George Floyd by Minneapolis police.

As part of a first round of cuts, $10 million is saved through delayed vehicle and IT expenses; $29 million through the wage and hiring freeze; $16 million by cutting 15% from the total of each department’s budgeted contracts. Smaller amounts are saved by eliminating non-essential expenses in categories like food, travel, postage and other supplies.

Intermill says the city’s strategy is working. “We can see paths to solving our $156 million shortfall without the need for mass layoffs.” He noted that some of the emergency expenses may be offset by federal funding through the CARES Act or FEMA disaster relief.

A second round of cuts is coming in July. This has the potential to be a more political process with council members making choices to fund certain priorities by defunding others. And it comes on the heels of a council majority pledging to defund the Minneapolis Police Department and re-imagine public safety. Still, it appears the boldest moves on public safety are likely to come after the year-long process of engagement and research set up by the council in a resolution last week.

On July 9, Mayor Frey will present a budget. Over next two weeks, the city council will amend that budget. Before the council’s final vote on July 24, two virtual public hearings will be held — on July 14 and 22.