Minneapolis council adopts budget that increases property tax levy 6.8% over 2024

After three days of budget revisions and a whopping 74 amendments, the Minneapolis City Council approved a property tax levy increase of 6.8% — the largest since 2010 — to fund the city budget next year.

Council members worked late into the night Tuesday as they scaled back Mayor Jacob Frey’s original proposed levy increase of 8.1%, largely fueled by inflation, plummeting downtown property values, higher city employee salaries, millions in mandated police reforms and the end of federal pandemic funds. In August, Frey proposed a $1.9 billion budget.

The exact impact of the 6.8% levy increase on property tax bills wasn’t available Tuesday night, but a 7% increase would have resulted in an additional $170, or 9.5%, in city taxes for the owner of a median value $331,000 home, according to the city assessor’s office.

“A budget is a reflection of values — the Mayor’s proposed budget valued bloated bureaucracy and high property taxes, the Council stepped in to reflect the values and needs of our residents — decreased property taxes and funded programs that impact their everyday lives,” Council Vice President Aisha Chughtai, who chairs the Budget Committee, said in a statement after midnight.

Frey released a statement late Tuesday saying he would review the “unprecedented” number of council amendments over the next day and make a decision on whether to sign it. He said the council’s budget proposal sets the city up for paying increased property taxes down the road, and cuts homelessness response and police recruitment to fund “pet projects.”

“Financial times are tight and when federal funding is likely to be withheld and state dollars are in short supply, we need to be responsible with our tax dollars,” Frey said.

Of the 39 people who testified at the final budget public hearing Tuesday night, only a handful complained about their taxes going up. One of them was Maren Macosko, a teacher who said her East Lake Street music venue’s property taxes were going up 33% and her home’s taxes were going up nearly 18%.

The levy is the total amount of money raised through property taxes. Changes to individual tax bills, which also include taxes raised by the school district, county and other taxing bodies, will vary.

Although the final vote on the levy was 12-1, with only Council Member Linea Palmisano voting “no,” many of the budget amendments over the past three days were approved by the council’s more progressive majority over the sometimes heated objections of other members more aligned with Frey. Council Member Andrea Jenkins, expressed frustration at “all of these new programs and new spending.”

“Our taxpayers are feeling completely over-burdened,” Jenkins said.

The council rejected raises for one group of employees, voting against giving 4% cost-of-living raises to 161 appointed city employees (typically directors) that are among the city’s highest-paid workers. The council voted 7-5 against the raises, saving $1.1 million.

Palmisano called the decision to deny raises to just one group of employees “just plain wrong” and suggested “If we do this, maybe we need to take a look at our own salaries.” The 13 Minneapolis council members are paid $109,846 annually. Council Member Katie Cashman said denying raises is better than cutting jobs.

Most of the budget revisions moved money around to fund programs the council wants or to beef up public safety in certain areas of the city. The council directed the Neighborhood Safety Department to do safety initiatives in the neighborhoods of Hiawatha, Whittier, Longfellow and Midtown Phillips. Palmisano likened them to pork-barrel projects rather than a data-driven public safety strategy, saying, “This should not be a free-for-all for people to grab things for their neighborhoods.”

Chief Operations Officer Margaret Anderson Kelliher said Frey was concerned such earmarks would chip away at the city’s overall public safety strategy.

The final batch of amendments approved Tuesday night included many directed to specific nonprofits and projects, including the Latino Center for Community Engagement, Mercado Central economic development project, One Southside Clinic project and Mni Sota Fund Indigenous Wealth Building Center.

“I object to how we’re picking winners and losers here tonight,” Palmisano said. “I’ve never seen something like this before.”

Vetaw said the entities should have to go through a competitive process to get funding.

“It’s favoritism,” she said.

Supporters countered that they were funding worthy endeavors sought by their constituents.

The council also: