Citizens of Minneapolis were dealt a shock last Wednesday when Mayor Jacob Frey began a push for an increase in the city’s property tax levy of 7.8 percent next year. If successful that would mean the city would be hit with the biggest increase since 2010.

It could have been worse. Raising the specter of far more tax pain, in his budget address on August 13, the mayor said that with no action, the property tax hike be as high as 13 percent.

Minneapolis is hardly alone in facing cutbacks and the threat of increased taxes. On August 5, a research analysis by Josh Goodman at the Pew Charitable Trusts reported that at least 20 of the nation’s 25 most populous cities have reported budget gaps for fiscal year 2026. In general, increased fiscal tensions emerge from “rising costs, revenue sources struggling to keep up, reduced federal support, and increased fiscal and economic uncertainty.”

While Pew’s research focused on the largest population cities, the same strains are facing other local governments, as well as schools and transit systems. (In city population, Minneapolis is the 46th largest.) 

Currently, the budget debate there is playing out over the second year of its biennial budget, which incorporated both fiscal years 2025 and 2026. 

To balance the budget and avoid an even larger property tax increase, the mayor has proposed $23 million in cuts. These include scaling back planned pilot programs, cutting vacant positions, ending double-overtime for police and “Shifting funding from untested new initiatives.” The mayor also proposed reducing the city’s four Open Street Festivals to three.

Without those cuts, the mayor reminded residents that the budget would need to reach far deeper into their pockets. “With no action, this year’s property tax levy increase was projected to reach 13%. That would have been unacceptable and unaffordable to working families,” he said. 

The City Council will be considering the mayor’s proposals in coming weeks. Local news reports project a likely battle and continuing tensions coming over city spending and tax adjustments that are in store based on past mayor-council relations, along with general concern over future fiscal uncertainty that emerges from changing federal-state-local relations.

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