In the name of helping everyday St. Paul residents achieve financial stability, Mayor Melvin Carter has advocated for eliminating library fines for overdue books, opening college savings accounts for young students and implementing a $15 minimum wage citywide.

His next initiative may be the most all-encompassing yet. On Wednesday morning, the St. Paul City Council — which is already hard-pressed to trim the mayor’s tax levy — will discuss a key aspect of Carter’s 2019 budget proposal: finding roughly $400,000 or more to create an official Office of Financial Empowerment.

The office, which would be situated within the city’s Financial Services department, would include three city employees: a director of financial empowerment, a college savings accounts coordinator and a fair housing coordinator.

The funding would include $330,000 in new money, as well as additional sums from an existing housing trust fund managed by the St. Paul Department of Employment and Economic Development. About $100,000 of the total would go to non-salary expenses, such as public outreach.

“I’m really excited about it, frankly,” said Carter, in an interview Tuesday. “It’s a strategy to put millions of dollars right back directly in the hands of our lowest-income residents.”

Carter’s proposal, however, rolls out within a difficult budget climate. Members of the St. Paul City Council will discuss his proposal during their regular budget meeting Wednesday morning, which will focus on the city’s Financial Services department.

HOW WOULD IT WORK?

Through financial counseling, college savings accounts and other approaches, Carter hopes to follow the lead of cities such as St. Louis, San Francisco and Oakland, Calif., that have made it an explicit goal to battle poverty and financial instability through dedicated staff positions.

Carter said teaming with existing St. Paul-based nonprofits such as CLUES and Prepare + Prosper in a more coordinated fashion than ever before could boost the financial literacy of many of the city’s most vulnerable residents.

The mayor pointed to the lack of awareness around the federal earned income tax credit, which is targeted to low- to moderate-income individuals and couples, particularly those with children.

Said the mayor: “Twenty percent of the people who are eligible for an earned income tax credit never apply for it. If that’s case, that means in 2017, 5,000 of our lowest-income St. Paul families lost $11 million to $14 million.”

ST. PAUL’S GROWING NEED

Poverty can be measured in different ways, but the Minnesota Compass project (mncompass.org) led by Wilder Research finds that half the households in the city live on incomes of less than $50,000 per year. More than a third of all households live on less than $35,000.

In fact, one-third of the city lives within 150 percent of the federal poverty level, and 1 in 5 residents lives below the federal poverty level.

Also according to Minnesota Compass, more than 50 percent of renters and nearly a fourth of all households in their own homes would qualify as cost-burdened, or hard-pressed to make ends meet given their housing costs.

Minnesota Compass derives its statistics from a variety of sources, most of them focused on the 2012 to 2016 time frame, including the U.S. Census, the Minnesota State Demographic Center and the Metropolitan Council.

Tracy Fischman, executive director of University Avenue-based Prepare + Prosper, called financial instability a growing problem within St. Paul and society in general, in particular the documented gap between the savings of whites and blacks.

In addition to financial coaching for some 200 clients annually, her organization offers free tax preparation for 12,500 people. The mayor’s plan is “an opportunity to home in on some very specific initiatives and to build more cohesion among the organizations (like hers) that are already committed to doing this work.”

ANTI-POVERTY GOOD, HIGH TAXES BAD

Council members have been generally supportive of the mayor’s anti-poverty goals. In fact, with a rent crisis showing no sign of abating, they explicitly asked the mayor’s office to create a new staff position focused on affordable housing.

Nevertheless, almost every council member has pledged to lessen the impact of Carter’s overall budget proposal, which calls for an 11.5 percent tax levy increase next year.

For the owner of a median-value St. Paul home ($186,000 in 2019), the proposed St. Paul tax levy alone would add $77 to property tax bills.

Related Articles Minneapolis man pleads guilty to torching University Avenue business during May unrest

Charges: 17-year-old shot 15-year-old in face during marijuana deal in St. Paul

Man, 38, dies of apparent natural causes at Ramsey County jail

St. Paul district to wait on reopening schools, citing lack of staff

Sept. 30 is last day for public comment on Pigs Eye Lake makeover The total would be $188 if the St. Paul, Ramsey County and St. Paul schools tax levies are all approved as proposed, and it rises to $323 if a special school levy is approved in November.

St. Paul fee increases add another $23, not including a new $25 charge to cover organized trash collection, which begins this year and will be added to property taxes.

Carter said he’s not insensitive to those concerns, but the alternative would mean ignoring long-standing demands to improve city services, from fixing roads to restoring parks and recreation center programs that were trimmed around the time of the Great Recession of 2007 to 2009.

“I hear all over the city that we can do better for our children and families, that we have too many potholes, that we’ve cut too many rec center hours,” Carter said. “The budget that I’ve proposed I think directly reflects what we’ve heard as we’ve talked to people in every neighborhood across the city, and what our values should be.”