Minneapolis, St. Paul property tax increase on homeowners proposed for 2024
MINNEAPOLIS (FOX 9) - Citing increased staffing costs and new city investments, the Minneapolis City Council is set to approve a recommended city budget that would increase property tax on its residents.
Mayor Jacob Frey’s current recommended budget proposal for city spending is $1.8 billion in 2024 – a $60 million, or 8.3% increase from the 2023 budget adopted by the city council of $1.66 billion.
The proposed budget reflects $48.4 million in new investments in 2024.
A public hearing on Wednesday was the second of three scheduled for people to voice suggestions regarding the recommended budget. Collectively residents and stakeholders offered concerns about funding for public safety, including police, and housing.
The current recommended budget would include a 6.2% increase in property tax levy for homeowners in 2024, effectively raising the total amount levied by the city to $27.7 million in 2024.
According to city documents, the proposed property tax levy would increase a median-value home of $331,000 by $150 to $160 annually.
Under the recommended levy for a median-value home, a homeowner’s property tax bill of $1,952 in 2024 would reflect spending in general government service ($576), police ($409), parks ($342), city capital and debt service ($260), fire ($154), public works ($134), pensions ($56) and public housing projects ($21).
The proposed budget contains ongoing funding for the Minneapolis Police Department, the city Attorney's Office, the Civil Rights Department, and the Information Technology Department.
The 2023 adopted budget had 4,174 full-time equivalent employees (FTEs) on salary, while the 2024 recommended budget includes a total of 4,337 workers employed by the city. In 2023 workforce costs totaled $485.3 million, while proposed 2024 workforce costs are projected to total $528.1 million.
The city is expected to receive additional sales tax revenue of $6.2 million in 2024 to offset some costs.
A final public hearing will be held on Dec. 6, with the city council marking up and adopting its final budget in December.
St. Paul property tax
Meanwhile, the St. Paul City Council approved a maximum property tax levy increase of 3.7% for its homeowners in September.
A median-value home of $267,400 in St. Paul is estimated to see a tax bill of $1,254 in 2024 – an estimated decrease of $26, due in part to the assessed value of commercial and industrial properties increasing at a faster pace than homes in St. Paul.
The previous year St. Paul homeowners faced a 15% property tax levy increase, with the city citing both inflation and street maintenance as the main reasons for the increase.
A final budget is expected to be approved in early December.