Duluth mayor proposes 2.7% levy tied to inflation, plus trust-fund earnings and cuts to help close $7.3M 2026 gap

Mayor Reiner proposed on Tuesday that the City of Duluth set a 2026 maximum property-tax levy equal to 2.7 percent, tied to the Consumer Price Index for the 12 months ending July 2025, and pair that levy with a package of revenue and expense measures to address a projected $7.3 million general-fund gap for 2026.

The mayor told the council the two legally distinct statutory duties are to set the maximum levy in September and adopt a final budget by December; he urged voters and residents to understand how Duluth’s levy interacts with other taxing authorities. "Not every single tax dollar collected in the city Of Duluth goes to the city of Duluth," he said, noting that under last year’s levy roughly 41 percent of a dollar in property taxes went to Saint Louis County, 27 percent to the city, 26 percent to the school district and the remainder to parks and other taxing authorities.

Why it matters: the administration says wages and benefits drive Duluth’s budget pressure — roughly 85 cents of every city dollar goes to personnel costs — and recent collective-bargaining increases, along with flat local-government aid, have produced multi-year deficits. The mayor framed the 2.7 percent levy as an "inflation-only" step (the administration also proposes capturing 1.4 percent in new growth), producing a combined figure of about 4.13 percent when growth is counted; the administration calculates the levy portion would add just under $2 million in revenue.

Details of the package: the mayor and his finance team presented a six-part strategy the administration said would spread…