8 takeaways from Mayor Jacob Frey’s budget plan that increases property tax levy by 7.8%

Mayor Frey’s $2 billion budget proposal unveiled Wednesday would require a 7.8% increase in the city’s property tax levy.

That would raise the total dollar amount levied by $39 million.

“This is not an austerity budget,” Frey said in his annual budget address. “This is a recalibration.”

If Frey’s budget passed untouched, the owner of a median Minneapolis home valued at $333,000 would pay $2,272 in city property taxes in 2026, an increase of $240. The county, school district and Municipal Building Commission set their levies separately. The city levy pays for things like policing, firefighters and street repairs.

With rising construction costs and employee salaries, dropping downtown office building values, and President Donald Trump’s funding changes threatening to wreak havoc on the city budget, the budget-crafting process was all about finding cuts this year. Just to maintain current spending levels, the city’s property tax levy would have had to go up by about 13%, Frey said.

That’s an even worse starting point than last year, when the more progressive City Council and mayor clashed over a $1.9 billion budget, which Frey vetoed in a historic move. The final, council-approved budget required a 6.8% increase in the property tax levy.

This year, Frey said his priority was to reduce that 13% projected increase. Rather than bring ideas for new programs — last year, city departments had 145 new spending proposals — city employees were asked to find ways to save money.

But Council President Elliott Payne said Frey doesn’t work with the council, and didn’t even have one-on-one meetings with council members to talk about their budget priorities, as in past years. The mayor’s spokeswoman said Frey did group meetings, and every council member had an opportunity to share their priorities.

Some City Council members expressed concerns about some of the cuts and spending shifts proposed by Frey, who says the city should invest in “proven programs” rather than “launching new ones that are untested or unsustainable.”

One such shift is a proposal by Frey to move funds from an emergency housing voucher program the City Council approved last year to the Stable Homes Stable Schools housing assistance program, which is facing a budget shortfall. Frey said Stable Homes is a proven, underfunded program.

Council Member Jason Chavez called that “unacceptable,”

“The Minneapolis City Council lowered the mayor’s proposed levy last year, and we proved that we can lower the levy while also investing in community programs that our residents strongly believe in,” he said.