Minneapolis Budget Shows 11.2% Property Tax Increase
Minneapolis Budget Committee reviewed preliminary 2026 budget calculations Monday showing an 11.2% property tax levy increase that officials acknowledged must be reduced before final adoption.
Budget Director Jayne Discenza presented the Current Service Level budget, which estimates costs if the city maintains existing services without changes. The preliminary budget shows expenses increasing 3.89% while revenues grow only 3.64%, creating pressure on property taxes.
11.2% is well beyond the bounds of what a normal budget process is," Discenza told the committee. "What we've heard consistently from the mayor and also from the council is that is not an acceptable level.
The budget analysis revealed declining downtown development activity as a concern, with only 12 major projects coming through Planning Commission in 2024 compared to 29 in 2023. This reduction affects construction code services revenue and signals weaker development activity citywide.
Personnel costs represent the largest expense driver, with salary and fringe benefits increasing about $30 million from the 2025 adopted budget. The city budgets for over 4,000 full-time equivalent positions, with 16 new positions planned for 2026, primarily firefighters transitioning from federal grant funding. Mayor's recommended budget will be released in mid-August, followed by fall budget presentations and public hearings before December adoption.
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Full analysis
Areas of Interest (5)
- City facing 11.2% levy increase threshold for 2026 before budget adjustments
- Shift in city revenue reliance: moving from non-property tax sources to property taxes
- Concerns over Downtown Assets Fund balance dropping from $85M to $29M by 2031
- Development slowdown: Planning commission project approvals dropped from 29 in 2023 to 12 in 2024
- New revenue source identified: speeding citation revenue starting August/September
Notable Quotes (2)
The current service level this year is not really the starting point for budget decision making, but rather a reference point.
11.2% is well beyond the bounds of what a normal budget process is... that is not an acceptable level.
People (2)
Emily KoskiChair, Budget CommitteeBudget Committee Chair, leads meeting, manages speaker list, oversees proceedings.
Budget Committee Chair, leads meeting, manages speaker list, oversees proceedings.
Jayne DiscenzaBudget Division StaffBudget division representative, provides technical presentation on 2026 supplemental budget.
1 quote
Budget division representative, provides technical presentation on 2026 supplemental budget.
“The current service level this year is not really the starting point for budget decision making, but rather a reference point.”
Explaining the shift in budget methodology for the 2026 cycle.
Places Mentioned
Events & Meetings (2)
- Monday, July 7th, 2025: Budget Committee Meeting
- June 11th: Board of Estimate and Taxation presentation
Source document
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Other Topics from This Document
2026 supplemental budget revenue and expenditure report
Current Service Level (CSL) methodology and financial framework
General Fund expense and revenue projections
Capital Improvement Program status
Property tax levy forecasting
Internal service charge allocation and growth
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