Across-the-board budget cuts may be the best solution
There are a few notable events in Minneapolis politics today. Mayor Frey must decide whether to veto the Labor Standards Board resolution passed by the City Council, while council members have until 5 p.m. to submit amendments to the Mayor’s proposed 2025 budget.
In our previous newsletter, we expressed support for Council Member Rainville’s amendment to cut budgets across all departments. The response was one of our most read newsletters with over 8600 readers. The social media posts reached over 10,000 views on Nextdoor and over 16,000 on Reddit.
We want council members to know that 95% of the hundreds of comments we received were residents in support of reduced spending. Many of them had opened their Hennepin County property tax schedules and been shocked. Seniors and people on fixed incomes wrote about the financial strain being caused by the increases.
Reverse Compound Interest
If you’re among the 78% of Americans saving for retirement, you likely understand the basics of compound interest. With a median retirement savings of $87,000, here’s a simple illustration:
At age 40, let’s say you have $87,000 in your IRA. In the first year, you earn 8% interest, bringing your total to $93,960. In year two, earning the same 8%, you gain $7,516 instead of $6,960 because the interest is calculated on the higher balance. This brings your total to $101,476. Year after year, this compounding process accelerates, demonstrating how wealth can grow exponentially for those who already have savings. Conversely, those with little to no savings often find themselves left behind.
With taxes, however, this compounding process works in reverse, as you essentially become the one paying the “interest.” For example, if the mayor proposes an 8.1% budget increase for 2025, the additional 9.3% proposed for 2026 will be applied to a higher tax base. This compounding effect on taxes is why seniors and others are advocating for reduced city spending—to halt these escalating increases. (Note: There are several factors impacting this equation, such as your home value. Please leave a comment if you have a more sophisticated explanation of how it works.)
Consider this: even if you’re working full-time, your salary often doesn’t keep pace with rising expenses. If you earn $60,000 and receive a 3% raise, your salary grows to $61,800. But if your property taxes increase by $300, that raise shrinks to $1,500. After factoring in income taxes, utilities, groceries, and skyrocketing home insurance costs in Minneapolis, that raise effectively vanishes. This financial strain is particularly acute for seniors and those on fixed incomes. Unfortunately, the DFL seems to overlook this arithmetic.
The mayor likes to assert that the average taxpayer will only face a $300 increase in 2025. While that may be true, it fails to account for the cumulative impact of successive increases over time.
The Snowball Effect
While a proposed 8.3% increase in 2025 property taxes may seem manageable, homeowners who have lived in the same property for the past five years—many of them seniors—have likely seen their taxes rise by greater than 25% during that time. With the additional 9% increase anticipated for 2026, these homeowners will face a total increase of 36% over six years. During this period, many have not seen their incomes grow proportionally; some even experienced income declines due to the COVID-19 pandemic and continue to battle inflation just to break even. This compounding effect on property taxes is unsustainable, which is why we support Council Member Rainville’s amendment.
We advocate for across-the-board spending cuts for several reasons:
- Departments won’t self-identify budget surpluses. No city department will voluntarily step forward to say their budget is excessive.
- The mayor and council are unlikely to agree on priorities. Determining which departments should face cuts often leads to political gridlock.
- Single-issue lobbying dominates decision-making. Advocacy groups with loud voices and strong networks can intimidate decision-makers, making it harder to evaluate spending priorities objectively.
While most feedback on our last newsletter was positive, the few critics were largely those focused on single-issue causes. These groups often label opponents as being funded by the GOP, backed by the wealthy, or dismiss them as anti-worker or anti-environment. Such tactics alienate everyday residents who feel their concerns are ignored.
Many voices go unheard—not because they lack valid concerns, but because they don’t shout or rally online. They are ordinary people: retirees who feel burdened by ever-increasing taxes, cutting back on their budgets to make ends meet.
Wanting our DFL-DSA city council to recognize and respect the financial constraints of their constituents does not make someone a Republican or a right-wing tool. Branding individuals who call for lower taxes and practical governance as “right-wing” diminishes broader support for progressive causes.
Advocating for a government that reduces spending in times of reduced revenue shows a commitment to responsible and sustainable governance. It means prioritizing the needs of a broad spectrum of residents rather than capitulating to the loudest, most organized groups. Unfortunately, the unwillingness to do so harms not only the city but also the DFL’s ability to connect with the people they aim to serve.
This piece has been edited from its original publication in the Better Minneapolis newsletter.
