Good evening: City budget officials presented the mayor’s recommended 2026 budget to the Board of Estimate and Taxation on Sept. 10, 2025, asking the BET to set a maximum property tax levy that would raise the total levy by 7.8 percent compared with 2025. Jane DeCenzo, the city’s budget director, and Justin Coles, the manager of budget information and analysis, outlined spending and revenue changes needed to balance a budget driven by rising personnel and capital costs.

The presentation showed total city spending rising about 7.41 percent — roughly $140 million — with 24 percent of that growth coming from salaries and fringe benefits and 64 percent from an expanded capital program. Budget staff said the 7.8 percent levy is the product of multiple management decisions that reduced an early current-service estimate of 13.1 percent down to the recommended figure, including revised vacancy assumptions, reductions in contracted services, and other administrative savings.

City officials said the levy recommendation is the final balancing tool after forecasting non‑property revenue streams such as local option sales taxes, bond proceeds and intergovernmental aid. Using the recommended levy, the presentation estimated the annual property tax bill for a medium‑value Minneapolis home would be about $2,272, with roughly $393 allocated to parks and recreation and $500 to the police department. The BET is scheduled to set the maximum levy on Sept. 17 and the city will certify the final levy to Hennepin County on Sept. 30.

Budget context and savings: DeCenzo and Coles walked the board through the development process that produced the 7.8 percent number. Staff said the 13.1 percent figure represented the “true cost” of maintaining current services before management adjustments. To reduce that burden, the administration: used tightened vacancy and health‑insurance assumptions, removed certain food and beverage budgets, reduced nonprofit contract spending by $5 million and overtime by $3.7 million, and reduced medical and dental premiums by about $3 million through conservative personnel assumptions. The recommended budget uses limited fund balance and a planned $2 million from fund balance to cover the start‑up cost of the new state‑paid family medical leave program in 2026.

Controller’s report and fund balances: City Controller George Hargrove presented the financial status report as of June 30, 2025. He said the general fund’s projected year‑end fund balance is about $149 million, which exceeds the city’s 17 percent minimum policy (about $119 million) by roughly $30 million. At the same time, Hargrove warned that fund balances are declining compared with last year and flagged several revenue and expenditure pressures: property‑tax collections were running about $19 million under budget and public‑safety spending was projected to be roughly $16 million over budget in 2025.

Board questions and clarifications: President Steve Brandt and other BET members asked staff about how much of the proposed 2026 budget relies on reserves. Finance staff said the recommended budget includes a planned use of fund balance in the general fund of about $8.7 million. Staff cautioned against drawing reserves further given rating‑agency scrutiny and federal funding uncertainty. Budget staff also said that reducing the levy by 1 percentage point would require about $5.4 million in additional cuts or new non‑levy revenues.

Public input at the hearing: The board opened a public hearing on the recommended levies and received public comment. Dan Edmonds, an educator and North Side resident, said he “strongly oppose[d]” an “upwards of 7% property tax increase,” criticizing spending priorities and police enforcement of encampment removals. In contrast, several Park Board commissioners testified in favor of funding newly opened riverfront parks (see separate coverage). Another resident, Tom Katlak, called the city in a “fiscal emergency” and urged deeper cuts.

Next steps: The Board of Estimate and Taxation will vote on the maximum property tax levy at its Sept. 17 meeting. The city then must certify the levy to Hennepin County by Sept. 30. Budget committee hearings and department presentations are scheduled to continue through October; the budget adoption is planned for December.

Ending: Budget staff left the BET with a detailed interactive budget book and a property‑tax estimator linked in the book to help residents and policymakers review impacts by property value and ward.