Ned Smith, the Metropolitan Council's chief financial officer, presented an overview Aug. 13 of the council's preliminary 2026 operating budget and levy strategy, describing the operating roll-up, levy constraints and next steps in the budget schedule.

Smith told the council the councilwide operating roll-up for 2026 is about $1.8 billion. He said the council plans a modest, targeted levy increase and reiterated that levy-setting is governed by an index the council described as the implicit price deflator (an inflation measure released by the state) that limits growth in the council's non-debt-service levy. Smith said the council's approach has been to target a 2% increase to the levies as a policy goal, not a statutory cap.

Key figures Smith presented included a proposed livable communities demonstration account levy of $15,500,000 and a proposed general purpose levy of $19,800,000 for 2026. He said the statutory tax-based revitalization account levy is fixed at $5,000,000. Smith also noted a local housing incentive allocation of $500,000 to the Livable Communities Demonstration Account and $1,000,000 to the general purpose levy. He reported a total levy roll-up of $97,980,000 for 2026, reflecting the council's mix of debt-service levies (largely transit debt) and non-debt levies.

Smith outlined how levies are allocated across the seven-county region, noting that portions of the region pay transit and parks debt-service levies while other jurisdictions do not. He gave a sample property-tax impact for an owner of a $300,000 home: about $48 per year if inside the transit-taxing area and about $18.20 per year if outside, and reiterated that the council can lower an approved levy later but cannot raise it above the approved amount during the budget process.

On operating drivers, Smith said salaries and benefits are the largest cost driver, with FTE growth contributing to upward pressure; contracted services across the council are up roughly $60,000,000, driven in part by increased information technology contracts and transit contract services for expanded service hours. He said the council's OPEB (other post-employment benefits) liability is fully funded, which he characterized as an uncommon and favorable position for a public entity.

Smith described the timeline: the Aug. 13 presentation was an informational item; staff will return with capital plans in October and the council will take votes on the unified budget and levy recommendations later in the fall. Smith said the council historically balances debt-service obligations (which he likened to mortgage payments) with policy goals to maximize general-purpose and livable-communities levies within the implicit price deflator constraint.

Less-critical details: Smith said total FTEs across the enterprise are about 5,770, transportation accounts for the majority of budgeted FTEs, and environmental services staffing is smaller now than in the 1990s despite added facilities.