When the St. Paul City Council voted down the mayor’s 2025 budget proposal and approved their own version of the city budget on Wednesday, they trimmed police non-emergency overtime by $1.2 million — with a catch. The council placed $700,000 into a contingency fund, which St. Paul Police can only access if they begin issuing quarterly reports to the council on the types of activities and positions being covered by overtime. St. Paul Mayor Melvin Carter said he was unimpressed. Following the council vote, Carter — who has the power to veto the budget or issue a line-item veto to particular aspects of it — issued a statement indicating his office would perform its “due diligence” analyzing the fiscal impacts of the council’s budget changes and “determine next steps in the coming days.” The mayor, who had presented a $250,000 cut to police overtime in a compromise proposal that was rejected Wednesday, said the budget the council approved 5-1 relies on too many financial gimmicks and cuts to vital programs. Carter held a media event outside the council chambers immediately prior to their afternoon meeting, where he was joined by city department officials, nonprofit leaders, labor and advocacy groups who joined him in calling for a 6.9% property tax levy increase to fund the mayor’s priorities. A 5.9% levy increase Citing homeowner demands for property tax relief, the council instead approved a 5.9% tax levy increase, slashing over $4 million in spending from the 2025 budget proposal that the mayor presented in August. As a result, the owner of a median-value home ($275,000) can expect a $98 increase to the city portion of their property tax under the new levy instead of a $132 increase, though county, school district and Metropolitan Council levies add additional sums. Council President Mitra Jalali on Thursday said while she had supported the mayor’s budget proposal and cast the sole dissenting vote against the council’s version, the final product still maintains added funding for key shared priorities between the two budget documents, from housing to libraries and climate initiatives. “I do think that this budget does make needed investments in critical areas, and our other option is not having a budget at all,” Jalali said. Mitra Jalali. (Courtesy of the candidate) Between the general fund and special funds, the 2025 operating budget approved Wednesday totals $896.7 million. Another $88.7 million will cover the city’s debt service and $164.7 million will fund the capital improvement budget. Here’s a look at 10 spending areas in the new 2025 budget: Public safety The budget approved by the city council raises the overall police budget derived from the taxpayer-supported general fund by $9 million, largely to cover contractually-required wage increases. It also supports the city’s “community-first public safety” model by funding free youth sports, free Sunday family swimming at the Oxford/Jimmy Lee Rec Center on Lexington Parkway, three additional firefighters and other community supports. Jalali said “the council had a major concern across the board this budget season around police overtime overspending,” which requires “more visibility.” With that goal in mind, the council cut police non-emergency overtime by $1.2 million, while asking that the police department report back every three months on the extent of its overtime spending, including what job categories and activities are triggering those expenses. As long as the department meets that requirement, it can access a $700,000 contingency fund. “The police have spent their overtime budget by millions of dollars, and it’s year after year,” Jalali said. “It’s a concern to ask taxpayers to fund overspending.” The mayor noted this week that when police staffing is tight, overtime expenses will inevitably increase. Downtown The new city budget makes a series of investments in downtown St. Paul, including putting $1 million toward waiving certain fee requirements for developers who convert downtown office buildings into housing. Additional funds are dedicated toward downtown wayfinding and signage, banners and street lighting. Rebecca Noecker. The council chose not to fund the mayor’s request for a new downtown project manager, though Ward 2 Council Member Rebecca Noecker — who chairs the city’s Housing and Redevelopment Authority — said an existing senior planner could absorb many of the same duties. Otherwise, the council funded “nearly every single request of the mayor’s proposal to invest in downtown,” Jalali said. Housing and rent control The council plans no immediate changes to the city’s voter-approved rent control ordinance, even though the mayor last August called for the council to release new construction from the city’s 3% annual limit on residential rent increases in order to help revive citywide housing construction, which has lagged. Instead, the budget puts $100,000 derived from the HRA parking fund toward a broad study of the city’s housing policies, which range from rent control and tenant protections to efforts to promote “missing middle” mid-sized housing, Jalali said. The council budget funds other priorities in the mayor’s budget, including $1 million for rental assistance, expanding the city’s “Inheritance Fund” for housing down payment assistance to include West Side families displaced decades ago by industrial expansion, as well as a proposal to create a pool of funds that supportive housing providers can access for operating costs, which would be funded in part by Ramsey County. Libraries The budget puts $500,000 into reserves for the “Transforming Libraries” initiative, which seeks major renovations or reconstruction of the Hamline-Midway, Hayden Heights and Riverview libraries. Another $175,000 will support keeping library materials up to date. Trees St. Paul has long struggled to keep up with demand for stump removal and tree replanting after removing thousands of ash trees impacted by the parasitic Emerald Ash Borer from public boulevards. The budget includes $500,000 to help St. Paul Parks and Recreation’s forestry crews replenish the urban tree canopy, but the mayor has objected to the funding source — STAR funding from the city’s longstanding half-cent sales tax, which is targeted to economic development projects. That $500,000 had previously been intended for St. Paul Public Works, which planned to use the money for sidewalk improvements and mill and overlay roadwork. “That cut was made for this money to go to forestry now,” Jalali said. Home weatherization The budget continues to fund two home weatherization initiatives, but combines them under one umbrella. The “Healthy Homes St. Paul” program is funded by the American Rescue Plan Act dollars, while the new “Power of Home” initiative — which has a greater focus on older properties and low-to-moderate income homeowners — will derive funding from a franchise fee on Xcel Energy home heating bills, newly instituted by the city in the month of April. “It’s essentially a $1.3 million combined investment in home weatherization,” Jalali said. Human rights The city’s department of Human Rights and Equal Economic Opportunity investigates labor complaints and oversees vendor procurement and contract compliance, among other duties. The department, which has suffered heavy turnover at the top, has operated without a permanent director for more than two years, splitting responsibilities instead between two interim co-directors. Over the mayor’s objection, the new budget does not fund a permanent director in 2025. “It holds back the salary for a year, anticipating there won’t be a hiring process for that role,” Jalali said. “The position does still exist.” Racial reparations The St. Paul City Council created a reparations commission to study the generational impacts of chattel slavery, segregation and race-based displacement. The city budget allocates $250,000 to sustain the commission in its second year, including money for staffing, community engagement and a “harm study” intended to quantify Black residents’ loss of material wealth as a result of historical injustices. Street festivals and cultural events From Grand Old Day to the Little Mekong Night Market, organizers of the city’s popular parades, street festivals and cultural events have long said they’ve been unable to keep up with ballooning costs for security, police overtime, road closures and other public safety requirements that have heightened with time. The new city budget sets aside $250,000, with the expectation the city will create a process by which event organizers can apply for grants to help defray some of those expenses. “This is critical because we continually hear about community events and festivals needing support to offset security costs,” Jalali said. Bike safety The budget takes $150,000 from parking revenues to fund “Next Best” bike safety improvements in line with the newly updated citywide bike plan, which puts more emphasis on protected infrastructure such as off-street bike lanes.