Minneapolis City Council adopts 2025 budget, 6.8% tax levy increase

The Minneapolis City Council on Tuesday night adopted the city's 2025 budget, which is set to increase the property tax levy by about 6.9% over the current year.

The $1.88 billion budget passed after the council made more than 70 amendments to Mayor Jacob Frey's initial budget proposal submitted in August, which called for an 8.1% increase to the property tax levy amid inflation, higher labor costs and other factors driving up costs for city services.

The budget passed with a 10-3 vote late Tuesday reflects approximately $7.12 million in expense cuts made by the council, as well as around $3.9 million drawn from the fund balance to offset new, one-time spending.

Still, the tax levy increase would become the largest seen in Minneapolis in over a decade and result in approximately $170 more owed in city taxes for the owner of a median value home.

The amended budget now goes to Frey, whose spokesperson shared the following statement Wednesday:

“The Council’s budget proposal sets the City up for paying increased property taxes for years to come. It cuts things we need to do like unsheltered homelessness response and recruitment of police, then uses the money to fund pet projects. Financial times are tight and when federal funding is likely to be withheld and state dollars are in short supply, we need to be responsible with our tax dollars. Over the next day, we will be reviewing the unprecedented 73+ amendments that the council has proposed and making a decision.”

Council Vice-President Aisha Chughtai, who is chair of the budget committee, has touted the council's effort to reduce the property tax hike.

“A budget is a reflection of values — the Mayor’s proposed budget valued bloated bureaucracy and high property taxes, the council stepped in to reflect the values and needs of our residents – decreased property taxes and funded programs that impact their everyday lives,” Chughtai said in a statement shared with KARE 11.

The budget passed by the council Tuesday differed from the alternative proposal Frey put forward Friday following pressure to reduce the tax levy, saying he'd agree to reduce the overall hike to 6.4% from the 8.1% he originally proposed.