Shakopee holds public hearing on proposed 2026 budget and 5.5% levy increase

SHakopee, Minn. — City staff presented the proposed 2026 budget and property tax levy at a public hearing Dec. 2, outlining a proposed levy increase of about $1.47 million, or 5.5%, and a recommended $300,000 boost to the capital improvement levy.

“The city annually adopts a budget and property tax levy for the upcoming year,” said Mr. Reinhart, the staff presenter, who said the city levy represents about 27.7% of a typical Shakopee property tax bill. The proposed 2026 levy was presented as approximately $28.2 million and represents a 5.5% increase from 2025.

Reinhart told the council the city remains one of the lowest-tax communities in the Twin Cities metro in its peer group and described revenue and expense drivers behind the proposal. Key revenue assumptions include $3.9 million in building permit–related receipts and new amphitheater-related contract revenues; the presentation also anticipates $450,000 of additional building permit revenue and a $616,500 increase in police contract revenue tied to the amphitheater.

On the expenditure side, staff highlighted personnel costs as the primary driver of the increase. Reinhart said three union contracts (patrol, sergeants and public works) include cost-of-living adjustments and step increases; the combined adjustments plus step increases are summarized as roughly $792,000 for COLAs and $388,000 for step increases. The budget also reflects an 8.3% increase in health insurance premiums and proposes a new building health inspector position and conversion of the clerk administrative assistant from part time to full time.

Reinhart described several one-time and near-term items, including a two-year comprehensive-plan update, an adjustment to equipment replacement and building rent charges, and use of certain internal fund balances to smooth debt service. He said the city set aside about $350,000 of general fund balance to cover debt service and proposed a $50,000 increase to the EDA levy.

No public comments were offered on the budget at the hearing. Reinhart said there was no action required that night and the council will consider formal adoption of the levy at its Dec. 16 meeting after the required notice period.

Correction note: transcript contained several misspellings of the city name and local program names; this article uses the corrected municipal name, Shakopee, and verified event names as spoken during the meeting.