Minneapolis Mayor unveils budget, ‘commitments, inflation’ to raise taxes

MINNEAPOLIS (FOX 9) - Minneapolis Mayor Jacob Frey unveiled a $1.8 billion budget proposal for the next two years on Wednesday that will raise property tax levies to honor commitments made in city services, and account for inflation in the process.

What we know

Within the spending includes a 20% raise for police and a 30% raise for public works employees throughout the next three years.

To make this work financially, Frey is proposing an 8.1% tax levy increase in 2025, followed by 9.8% in 2026.

Tax levy increases in 2025 would raise property taxes by about $200 for the median homeowner, with a home valued at about $330,000.

"We find ourselves at the cross-section of well-earned success, and uncomfortable transition. While change can be uncomfortable, we will find a way through," said Mayor Frey on Wednesday. "This budget presented a challenge between honoring commitments made, and recognizing the impacts those commitments can have on taxpayers. Inflation, and significantly higher but necessary labor costs, have increased the cost of delivering excellent city services."

Frey says the depreciating value of office buildings is also playing a factor. 

The city is about to run out of COVID-19 American Rescue Plan grants that provided a cushion over the last few years.

"Based on revenue projections this year, we learned early that just maintaining services would result in a $21 million deficit, or a roughly 11% levy increase," Mayor Frey said.

Next month the city will host a public hearing to get feedback from homeowners, before formally approving a budget in December.