Major cuts and a steep property tax hike. Those are the biggest two takeaways from Minneapolis Mayor Jacob Frey's budget address on Wednesday, as the city tries to overcome a large deficit.
The city faces a $60 million budget shortfall driven by rising police and fire department costs. There is also a fading commercial tax base, and the end of federal pandemic relief funds.
Frey says due to all of the above, they'll be trimming 100 city staff positions. To survive that shortfall Frey says his administration will need to punch through a grueling two-year financial "ring of fire".
"We had to make the difficult decision to reduce our workforce," he announced Wednesday. "I understand the impact to people and to employees that have worked proudly to better our city, and I'm deeply sorry."
The plan also introduces an 11.3% property tax levy. What that means for homeowners is several hundred dollars more in taxes.
"My 2027 budget proposal totals approximately $2.3 billion including a general fund of $753 million," Frey explains. "It proposes an 11.3% increase to the proposed tax levy, about $409 a year, or $34 a month for the median value homeowner."
Frey adds the city will still be setting aside millions in funding to expand affordable housing options.
City commissioners and the council will now debate these adjustments before the budget is finalized. Most say they support cutting redundant programs to refocus on core services, but already some are pushing back against proposed violence interruption cuts and that steep, double-digit property tax hike.
What also remains a major sticking point is finally addressing police and fire department overtime costs, which have spiraled due to shortages in staffing, and as a result of the city's response to Operation Metro Surge, the federal government's immigration crackdown in the city, early in 2026.
"I think it's important to recognize that we are in this position in the budget because of the overspending of the Minneapolis Police Department, including standby pay," Ward 9 Councilmember Jason Chavez said. "It is now going to cut city services in Minneapolis."
Some have also voiced sharp concerns regarding the specific cuts to community programs and the plan's reliance on heavier taxpayer burdens.
"The mayor has made commitments in past budgets to not do layoffs at all, and that has resulted in higher levies over these last few years," Council President Elliot Payne added. "To not have that commitment, to not have layoffs, but still see a double-digit levy increase is something that's quite surprising."
Payne says the path forward will be difficult as the administration and a divided council attempt to negotiate a compromise before the vote in December.
