Rochester proposes reduced budget, could lower 6% tax levy increase

ROCHESTER – Residents may see the smallest property tax increase in several years, according to a proposed city budget for 2026.

City officials want to use $664 million for next year, which would come with a 5.9% levy. That tax increase is a little more than half what Rochester staff initially projected, in part due to cuts across departments and redirected funding.

“We had a target this year to really have our departments look closely at what their opportunities were to make adjustments,” City Administrator Alison Zelms said.

Zelms told the Rochester City Council at a meeting that more than half of the city’s general fund will go toward police, fire and other emergency services.

Rochester expects some salary increases next year as eight of the city’s bargaining units will negotiate new contracts in 2026.

The city is also prioritizing several new positions, including full-time library workers, IT staff and a new police detective. At the same time, Rochester needs to gather funds to replace older vehicles and other equipment Zelms said would be necessary over the next few years.

The council will review financial proposals over the next few weeks before setting a preliminary budget and tax levy at the end of September. Rochester will finalize the 2026-27 budget at the end of the year.

The council sought to drive the levy even lower Monday. Council Member Shaun Palmer wondered whether full-time library positions were necessary, as well as a $32,000 program that promises to optimize snowplowing routes for public works drivers in the winter. And several council members debated whether planned arborists were necessary even as Rochester pursues better forestry initiatives.

Zelms said library officials are looking to transition into more full-time staff positions to improve scheduling, as well as potentially close the library on Sundays or Mondays.

Council Member Andy Friederichs urged the city to look into using more contractors rather than paid staffers for certain jobs like landscaping and maintenance, arguing Rochester may be able to save money by privatizing.

“There’s peak times for these things,” Friederichs said. “When it’s not a peak time, you’re carrying that employee all year round.”