Minneapolis' budget deficit requires job cuts, higher property taxes, Mayor Jacob Frey says

The city of Minneapolis is set to raise property taxes and lay off roughly 100 city workers in an attempt to balance the budget for the upcoming year, Mayor Jacob Frey said Wednesday.

The city is running on a $30 million deficit that officials said comes from a massive police overtime payout and dropping revenue from downtown properties. Frey outlined the 2027 budget in front of city staff in downtown Minneapolis Wednesday morning.

Frey described the moves as painful choices that he knows won't be universally popular, but he said without making them, that budget shortfall will only continue to grow. In fact, he says that budget gap could double to nearly $60 million by 2027. 

The mayor's budget proposal for 2027 totals more than $2 billion. To pay for that, he is proposing an 11.3% increase to property taxes, which he says will total about $409 a year, or $34 dollars a month, for the median-value homeowner. 

Frey also said they've cut 100 positions from city government, many of them supported by grants, one-time funding or temporary contracts. 

"There are programs worth protecting. There are taxpayers carrying a very heavy burden. Both of those things can be true at the same time," Frey said. "So the job isn't to satisfy one side or the other, the job is to make the best decisions we can for the long-term health of Minneapolis, and in that I hope we can find common ground, working together to arrive at two years from today."

Frey's address came amid a year of tumult across Minneapolis and at City Hall. The city is still dealing with the fallout of a federal immigration surge, which traumatized the community, depleted the local economy and killed two of the city's residents. During and after the surge, Frey and the city have fended off attacks from the Trump administration, including a recently dismissed Department of Justice lawsuit against Minneapolis Public Schools.

At City Hall, the mayor and the City Council clashed over the reappointment of Commissioner of Community Safety Todd Barnette, who now plans to leave the position at the end of the year. Brian O'Hara resigned as police chief after an internal probe into his conduct. His resignation came just weeks after Frey nominated him for reappointment. The search for a permanent replacement is ongoing.

Frey has made public safety one of his chief issues this year, focusing on crime in the Uptown neighborhood, public drug activity and police staffing levels.