Downtown property values are continuing to decline, and Minneapolis residents are bracing for a substantial property tax increase next year.
Mayor Jacob Frey explained what will amount to an 8.1% property tax increase in his 2025 budget address with the revenue going toward city operations, affordable housing, ongoing mandated police reform stemming from the murder of George Floyd, and city employee pay increases that he says are well worth it.
"We have a turnover rate of 3.9%, way below the average of most other cities," Frey said. "Applications are up 62%".
Frey has also earmarked funding to fight unsheltered homelessness, as well as what he calls a reactivation of Nicollet Mall into a pedestrian-only, creative playground that might include ice rinks, zip lines, ice bars, dogs parks, a ferris wheel, and plenty of art.
Frey's $1.8 billion budget factors in federal relief money running dry next year. He says city budget staff shifted and cut expenditures where they could. The plan also includes a 9.8% tax levy increase in 2026.
"I'm not expecting us to celebrate this lift because our residents have a new lift of their own in property taxes," says the mayor. "But this budget provides a way through. We're doubling down on programs that work. We're ensuring our resources are used effectively and we're making sure our communities feel the benefit."
The new budget comes with a significant raise of 30% for public works employees, and the already agreed on raise for Minneapolis Police officers. The new police contract will increase wages for officers by nearly 22%.
Another factor in the budget is the need to comply with the Minnesota Department of Human Rights settlement agreement and the upcoming U.S. Department of Justice consent decree, both coming after investigations into the police department after Floyd's murder.