A 'new day,' an old cash crunch: In first State of the City address, Coleman says St. Paul faces $20 million deficit ? and hard choices.

Byline: Tim Nelson

Mar. 9--It's a "new day" in St. Paul, Mayor Chris Coleman declared Wednesday in his first State of the City address.

But it's going to have a familiar feel to it: Coleman said the city is up against a major financial crunch for the fourth straight year, thanks to declining governmental aid.

"In 2007, we face a $20 million deficit and a growing gap between expenditures and permanent funding sources," Coleman told the City Council, scores of employees and others gathered in the council chambers for his first major address.

"If we were to tackle this issue entirely with tax increases, we would have to raise the levy by over 30 percent," the mayor said. Cuts would require a layoff of 150 police officers and firefighters.

"Neither option is acceptable," Coleman said.

Two months …