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Mankato council adopts 2026 budget and sets property tax levy
Summary
At its Dec. 1 meeting the Mankato City Council adopted the 2026 operating budget, fee schedule and CIP and approved a 2025 property tax levy payable in 2026; staff said the proposed tax extension rate is 40.76 and the general fund levy would increase about 7.5%.
The Mankato City Council voted Dec. 1 to adopt the 2026 operating budget, fee schedule and capital improvement program and to set the 2025 property tax levy payable in 2026.
Staff presented the proposal at a public hearing, reporting total recommended revenues of $182,148,000 and expenditures of $173,752,000 and stating a proposed tax-extension rate of 40.76. “The final rate to which we are proposing is 40.76,” Parker Schopenhamer told the council. The proposed levy for the city was presented as $26,370,000, with the general-fund portion at about $21,990,000 — an increase staff characterized as roughly 7.5% over the prior year.
Why it matters: Staff said the increases are largely driven by capital needs, reserve targets and rising personnel and contract costs while some pressure is offset by reduced debt-service levies. Schopenhamer summarized fund shares and staffing allocations and noted enterprise funds (utilities and the civic center) represent over half of total city revenue. He also recommended modest utility rate adjustments — a 3% water increase and a 3.75% wastewater increase — to sustain fixed-cost-of-service requirements.
Council discussion and public comment focused on the impact to households and small businesses. Resident Drew Campbell urged the council to “try to figure out ways to keep it under 5%,” saying his own taxes were rising substantially. Council members and the mayor acknowledged those concerns while describing limited options going forward, noting unfunded state mandates and recent reductions in the city’s debt obligations that have helped limit levy pressure. A council member told the chamber the staff originally brought a higher proposal and the adopted numbers reflect multiple sessions of review over 11 meetings.
Action taken: The council moved, seconded and approved the resolutions adopting the property tax levy payable in 2026 and the 2026 operating budget, fee schedule and CIP at the Dec. 1 meeting. The motion was announced as adopted during the public hearing following the staff presentation.
What remains: Staff and council members said they will monitor grant opportunities and bid outcomes that could affect actual local cost shares for capital projects included in the CIP. Any future grant awards will be handled through subsequent budget amendments, the staff memo said.
