The proposal released August 12, 2026, is not the final city budget. It begins a months-long process in which the Minneapolis City Council, the Board of Estimate and Taxation and the public will review the levy, staffing and spending plan before final adoption.

Estimated homeowner impact

Axios Twin Cities reported that the proposed increase would add approximately $409 per year for the median Minneapolis homeowner. That is an estimate, not a universal increase for every household.

The proposed levy is the city’s share of property taxation. A homeowner’s total property-tax bill may also include taxes from other jurisdictions, and the final amount will vary by property value and by decisions made elsewhere in the tax system.

About 100 positions could be eliminated

The recommendation calls for around 100 job reductions across city departments. Some savings could come from closing vacant positions or from retirements and other departures. Layoffs could make up the remaining difference, but the proposal does not mean every position reduction would result in a layoff.

The plan also would provide $13.1 million in additional funding for police overtime after the department exceeded its overtime budget. That creates a central question for the budget debate: how Minneapolis should balance higher taxpayer costs, police spending and reductions in the city workforce.

Specific service cuts should not be assumed at this stage. Department-level staffing and operational decisions could change as council members examine the recommendation and consider amendments.

Budget pressure behind the proposal

Minneapolis leaders had previously projected a general-fund shortfall of up to $33 million for 2027. City officials and local reporting have cited rising personnel costs, flat or declining revenue, inflation and the loss of federal pandemic-era funds as contributors to the pressure.

The Star Tribune reported that salary and benefits were projected to rise by nearly $36 million, while downtown commercial property values and related revenue remained under pressure. Axios later described the mayor’s team as confronting a broader problem of roughly $60 million when revenue losses and underestimated costs were combined.

Frey’s recommendation pairs a higher levy with position reductions and additional police overtime funding rather than relying on a tax increase alone. The final balance among taxes, staffing, spending and services remains unsettled.

What happens next

The City Council will review the recommendation through meetings, public hearings, public comments and possible amendments. The Board of Estimate and Taxation is expected to set a maximum levy in September, and the council is responsible for writing the final budget by the end of December.

Residents can follow agendas, hearing information, public comments and council actions through Minneapolis government meeting channels. Until the process is complete, the 11.3% levy increase, the proposed position reductions and the police overtime allocation remain recommendations rather than final 2027 decisions.

Sources

• City of Minneapolis — 2027-28 Mayor’s Recommended Budget
• Axios Twin Cities — Frey proposes steep Minneapolis levy hike
• Minnesota Star Tribune — Minneapolis leaders face projected $33 million budget gap