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Isanti Council opts to start 2026 budget work using fund balance to limit tax increases
Summary
Council members voiced support for using fund balance in the draft 2026 budget to offset large county and school tax increases, with staff directed to develop cuts from that starting point and return revised numbers at the next meeting.
Isanti City councilors on Tuesday reviewed two draft 2026 budget scenarios and signaled a preference to begin from the option that uses fund balance to blunt property tax increases.
Staff presented two alternatives: a draft that draws about $176,000 from reserve funds to hold down the tax levy and a draft that does not use fund balance. A council member said the goal is “to offset the housing value increase, with the reduction in our taxes the same amount,” and urged starting with the fund-balance option so residents face less of a tax shock from county and school increases.
The city’s finance staff noted Isanti’s fund balance had been about 62% of expenditures in 2024 and would fall to an estimated 52% under the draft if the council uses the fund balance amount shown. Staff reminded the council the city’s policy targets reserves between 35% and 70% and that labor contract outcomes or permit revenues could change those projections.
Councilors asked staff to prepare a single working draft starting from the fund-balance option and to return with additional cuts and updated figures at the next meeting. Staff said they would bring back revised department budgets at the next council meeting and a full updated draft in August.
Procedural note: the meeting concluded with a motion to adjourn from council member Peterson, seconded by council member Holmgren; the motion carried 4–0 and the meeting ended at 9:32 p.m.
