Minneapolis cannot preserve every service, absorb every rising cost and expect taxpayers to make up the difference indefinitely. Governing begins with an honest revenue forecast—and difficult choices within it.
Minneapolis residents are being asked to accept two facts that do not seem to fit together.
Mayor Jacob Frey’s proposed 2027 budget would increase the city’s property-tax levy by 11.3 percent. For the owner of a median-value home, the city estimates that would mean paying about $409 more next year. At the same time, the proposal would reduce spending by more than $20 million and eliminate roughly 100 city positions, although vacancies, departures and retirements may prevent some of those reductions from becoming layoffs.
Higher taxes and substantial cuts. That is not the usual way a budget is introduced. It is also the clearest evidence that Minneapolis has a structural problem rather than a temporary disagreement over a few programs.
The proposed $2.3 billion budget is intended to close a gap exceeding $60 million. The mayor’s office attributes roughly $28 million to $33 million of that amount to the cost of maintaining current services, with another $20 million to $30 million reflecting differences between departmental budgets and what those departments are actually expected to spend. Inflation, higher labor costs, expiring federal pandemic aid and falling downtown commercial-property values have all contributed.
Some recurring expenses have also been supported through one-time money, unfilled positions and budgets that did not fully reflect likely costs. Those choices may have helped the numbers work for a year. They did not make the obligations disappear.
A city can postpone the arithmetic. It cannot repeal it.
That brings Minneapolis to the most important question in this budget debate: How do we bring recurring expenses into durable alignment with realistically forecast recurring revenue?
The word realistically matters. Revenue is not simply whatever amount the city has the legal authority to collect. A budget forecast should consider what residents and businesses can reasonably sustain, what is happening to the tax base and whether today’s choices make it easier or harder to support city services several years from now.
A large one-year increase may sometimes be necessary. If a city has understated predictable expenses, relied on temporary funding or postponed decisions during an emergency, correcting the budget will be painful. Refusing to acknowledge those costs does not protect taxpayers. It merely sends them a larger and less predictable bill later.
But that cannot become the standing answer. If every new gap is closed through another unusually large levy increase, city spending is not truly aligned with forecasted revenue. The forecast has simply been adjusted to assume that taxpayers will continue supplying whatever the existing structure requires.
That assumption carries consequences. Homeowners feel property taxes directly. Renters can feel them through the operating costs of apartment buildings, even though taxes are not the only factor affecting rents. Businesses consider taxes along with labor, insurance, utilities and other costs when deciding whether to open, expand or remain in Minneapolis.
The pressure is also becoming less evenly distributed. Council Member Elizabeth Shaffer has pointed out that commercial and industrial property represented 34.8 percent of Minneapolis’s net tax capacity in 2017 but only 24.9 percent in 2026. Over the same period, the residential share grew from 48.6 percent to 55.6 percent. As downtown office values fall, more of the burden shifts toward homeowners, apartment properties and the people who live in them. Growing the commercial tax base is an important long-term response. It is not an immediate way to balance the 2027 budget.
After nearly two decades around Minneapolis campaigns, I have noticed that priorities are usually discussed one at a time. Affordable housing has a compelling case. So do public safety, parks, streets, public health and services for neighborhoods. Each can sound affordable while it is alone in the room.
A budget puts them all at the same table.
That is where political promises become governing choices. If recurring revenue cannot support every existing program at its current level, leaders must decide what government is obligated to do, what produces meaningful results and what may have to be reduced, redesigned or ended.
This does not mean treating every spending reduction as an efficiency. Eliminating an unnecessary administrative layer is different from reducing park maintenance. Leaving an unneeded position vacant is different from delaying inspections or weakening emergency response. A program that sounds valuable may not be producing enough public benefit to justify its cost. Another may save money today but create larger expenses later. The labels do not settle the question. Residents still need to know what will change and what consequences are likely to follow.
The same scrutiny belongs on expenses that have exceeded their budgets. The mayor’s proposal adds $13.1 million to more accurately fund police overtime after the department previously overspent that account. If the city knows an expense is likely to occur, it should budget for it honestly. An artificially low number is not savings.
But accurate budgeting cannot become an amnesty for weak financial control. Council members are right to ask why police overtime has exceeded its budget and what will prevent the same pattern from continuing. Taxpayers deserve both an honest estimate of what public safety will cost and evidence that someone is managing that cost. “Rightsizing” the number solves only half the problem.
The dispute over Park Board funding presents the same challenge from another direction. The mayor’s budget contains a 2.5 percent increase for the Park Board’s portion of the levy, while the board has requested 5.86 percent. Frey later said he would support a 3.2 percent Park Board levy increase if the board reduced its request, but the board has not agreed and no levy level has been adopted. According to Axios, the smaller increase would require about $3.1 million in reductions from the Park Board’s roughly $160 million budget. Park officials warn about effects on maintenance and services. The mayor argues that combining functions such as payroll, human resources and information technology could reduce duplication.
Both arguments need details. If consolidation will produce savings, residents should be told how much, how soon and what it will take to achieve them. If the proposed levy would require service reductions, the Park Board should identify which services, where and with what consequences. Long-term structural reform should not be presented as immediate savings unless it can actually be implemented in time.
That same discipline belongs in every Council amendment. A smaller levy is not a complete proposal until the corresponding reductions are identified. Restoring a program requires a funding source or an offset elsewhere. Additional money for a department should come with an explanation of what residents will receive and how performance will be measured.
These decisions should also be tested over more than one year. A plan that closes the 2027 gap by creating another one in 2028 is not a solution. Minneapolis needs a credible multi-year path showing how recurring expenses will fit within sustainable revenue, how the tax base can grow and what will happen if the assumptions prove too optimistic.
None of this makes the choices morally neutral. Taxes and service reductions affect people differently. A balanced spreadsheet cannot decide how much Minneapolis should spend on housing, safety or parks. Those decisions require judgment about the city’s obligations and the consequences for real people.
But arithmetic is not the enemy of values. It is where values become accountable.
The mayor has submitted a proposal, not a finished budget. The City Council will examine it, amend it and adopt a final plan near the end of the year. There is ample room to question the size of the levy, the programs being reduced, the management of departmental spending and whether the proposed efficiencies are real.
What will not work is a debate in which one side names every service it wants protected while another simply declares the tax increase unacceptable. Minneapolis cannot protect every service, hold down every tax and absorb every rising cost at once. Pretending otherwise only sends the decision—and the bill—to another year.
Every priority cannot be first. The work of governing is deciding which ones are, what the city can sustainably afford and who will accept responsibility for making the numbers hold.
Disclosure: David Tinjum served as campaign chair for Jacob Frey’s first two mayoral campaigns.
