St. Paul’s projected $26 million budget gap puts taxes and services in focus
St. Paul is preparing its 2027 budget around a projected $26 million gap, putting property taxes, staffing and everyday city services at the center of the next phase of City Hall debate.
The figure is a forecast, not an adopted deficit remedy. Mayor Kaohly Her is preparing her proposed budget, and the St. Paul City Council has not approved a final tax levy, spending plan or service reduction.
Taxes and services remain unsettled
Her has said a property-tax increase is likely as the city works to address the projected gap. She has also said city services could be affected, but neither she nor the city has identified a final list of department or program cuts.
In local reporting, Her pointed to higher operating costs, including health insurance, fuel for police and emergency vehicles, asphalt and materials used for street lighting. She has also emphasized the need to preserve industrial property and strengthen and broaden St. Paul’s tax base over time.
KSTP reported that department heads were asked to prepare multiple budget versions, including one with a 4% reduction across departments. Her also said a hiring freeze is possible and that any property-tax increase would be in the single digits. Those are planning options and statements from the mayor, not approved actions.
What the gap could mean locally
The budget debate reaches beyond homeowners’ tax bills. City spending supports public safety, road maintenance, infrastructure, parks, libraries, economic development, permitting, customer service and other operations used by residents, workers and businesses.
Homeowners and landlords could face higher city-related property-tax costs if the final levy rises. Renters could be affected indirectly by changes in neighborhood services or by property owners’ operating costs, although the eventual effect is not yet known. Businesses will be watching taxes, permitting and customer service, while city workers may face changes in hiring, vacancies or department budgets if proposed controls move forward.
At this stage, officials have not said which services would be reduced or how staffing would change. The final effect will depend on the mayor’s proposal and the council’s later review, amendments and votes.
Budget proposal is due before council review
St. Paul’s budget materials describe August through December as the formal proposal, review and adoption phase. The mayor submits a recommended budget to the council by August 15 under the city charter. The council then reviews the proposal, while city departments brief council members on its effects on programs, services, staffing and operations.
The council can review and amend the proposal before voting on the final budget. Key FY27 dates listed by the City Council are:
- August 15, 2026: Deadline for the mayor’s recommended budget to be submitted to the City Council.
- September 23, 2026: Vote on the maximum property-tax levy.
- November 30, 2026: Truth-in-Taxation hearing, where residents can provide public testimony.
- December 2, 2026: Vote to certify the final property-tax levy and adopt the FY27 budget.
The September levy vote sets the maximum amount the city can request through its property-tax levy; it does not by itself settle every final spending or service decision. The December vote is the scheduled point for council adoption of the city’s fiscal year 2027 financial plan.
Residents can weigh in before final votes
St. Paul’s budget engagement process includes ward meetings, council offices and public hearings. The City Council says residents, business owners, community organizations and other stakeholders can share priorities before key decisions are made.
The next listed ward event is scheduled for August 13, 2026, when Ward 7 Councilmember Cheniqua Johnson will host a meeting from 5:30 to 7 p.m. at Battle Creek Recreation Center, 75 Winthrop St. S. Residents who cannot attend can contact their council office with budget questions or service priorities.
For now, the central question is how St. Paul will address a projected $26 million gap while maintaining the services residents rely on. The answer will not be final until the mayor submits a proposal and the council completes its review and December vote.
Sources
- Saint Paul City Council FY27 budget engagement announcement
- CBS Minnesota deficit report
- KSTP report on tax and budget options
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