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City staff outlines proposed 2026 budget and levy at Truth and Taxation meeting
Summary
City staff presented the proposed 2026 budget and levy, showing use of $219,000 in fund balance, a projected 50.4% year-end fund balance for 2026, a modest decrease in the tax rate to about 43.79%, and a levy increase driven by growth in net tax capacity; council postponed final votes to Dec. 16.
City staff presented the City of Isanti’s proposed 2026 budget and levy at the Truth and Taxation meeting, outlining the process used to build the budget, major spending priorities and the tax impact for homeowners and businesses.
Nick Soulberg introduced the budget review and said the city will use about $219,000 of fund balance to cover an anticipated general fund shortfall in 2026. He said the city’s fund balance — the reserve measured against next year’s levied expenditures — is projected to be about 50.4% at the end of 2026 down from 62.1% at the end of 2024.
Soulberg described four priorities the levy will support: public safety (staffing for the police department and related services), street maintenance and public works, parks and recreation programming, and legal/financial compliance and capital projects. He told the council that Isanti has grown roughly 37% since 2016 and that demographic and construction growth have increased the city’s tax base.
On rates and levies, staff showed a proposed 2026 tax rate near 43.79% (a small decline from 2025) while the total levy is projected up roughly 3–5% compared with recent years. Soulberg explained that the apparent paradox — lower tax rate but a higher levy — is driven by increased net tax capacity (higher assessed values and new construction), so individual property bills can fall or remain steady even as the levy rises.
He also broke down levy changes by purpose: a 6% increase to the general fund levy, modest increases to capital maintenance and street construction funds, a 23% decrease in the tax-abatement levy and a substantial increase to the debt service levy. The city’s only debt being levied is scheduled to expire in 2029, Soulberg said.
Residents asked about property assessment timing and appeal processes. Staff and council explained that the county assessor sets property values (generally on a multi‑year rotation), that market sales and property improvements feed valuations, and that homeowners may appeal to the county assessor for a site visit and review.
Because council wanted to finalize several related items with updated figures, members voted unanimously to postpone final adoption of the 2026 budget, the 2025 tax levy collectible in 2026 and the enterprise fund budgets to the Dec. 16 council meeting. Staff said it will update budget documents to reflect decisions made at the meeting before that final vote.
The council’s next regular meeting for final budget action is scheduled for Dec. 16, when the updated levy and budget resolutions will be returned for formal adoption.
