Frey Proposes Tax Hike to Close $33M Gap
Minneapolis Mayor Jacob Frey's budget plan would raise property taxes 11.3% and cut 100 positions to address a $33 million shortfall.
Updated on Nov. 8, 2026 in Remote Work
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Minneapolis Mayor Jacob Frey has proposed closing a $33 million budget gap through an 11.3% property tax levy increase, the elimination of 100 positions, and the consolidation of several departments. The plan has drawn criticism from City Council members who blame Police Department overspending for the shortfall.
Why it matters
City finance experts attribute the gap largely to rising personnel costs combined with flat or declining revenue, a pressure that falls directly on residents through their property tax bills and on city workers through potential job losses. The dispute over whether police spending or broader labor costs are to blame will shape how the council weighs cuts against taxes.
The proposal would raise the property tax levy 11.3% against a $33 million shortfall, while labor agreements from 2024 gave the police union a raise of nearly 22% and public works employees 30% over three years. How much of the gap each measure closes, and whether the council adopts them, remains unknown.
The players
Jacob Frey
Jacob Frey is the mayor of Minneapolis, who proposed the tax levy increase, position cuts, and department consolidation to address the budget gap.
Soren Stevenson
Soren Stevenson is a Minneapolis City Council member who blamed Police Department overspending for the city's financial crisis.
Jason Chavez
Jason Chavez is a Minneapolis City Council member who blamed Police Department overspending for the city's financial crisis.
Robin Wonsley
Robin Wonsley is a Minneapolis City Council member who blamed MPD spending for increased property taxes.
Jayne Discenza
Jayne Discenza is Minneapolis's Deputy Chief Finance Officer, who said rising labor costs are the No. 1 reason for the budget situation.
The details
Frey's plan combines a property tax increase with 100 position eliminations and department consolidation. Council Members Soren Stevenson and Jason Chavez blamed Police Department overspending, and Council Member Robin Wonsley blamed MPD spending for higher property taxes, while Deputy Chief Finance Officer Jayne Discenza said rising labor costs are the top cause.
Timeline
2024: The police union won a raise of nearly 22% over three years.
Recent years: Minneapolis gave employees large pay increases.
Weeks before publication: Council members publicly blamed police spending for the budget problems.
Market Landscape
The budget gap follows the 2024 labor agreements that raised police pay nearly 22% and public works pay 30% over three years. Those contracts now sit against a revenue base the city describes as flat or declining, shifting the budget debate toward how much of the city's workforce cost it can carry.
If the proposed 11.3% levy increase is adopted, Minneapolis property owners would see a higher tax bill. The 100 proposed position eliminations would also affect city service staffing for residents who depend on those departments.
The takeaway
Budget gaps tied to labor costs force trade-offs between taxes, staffing, and public services. Residents can follow council votes on the levy and position cuts to see how those trade-offs are resolved.
Further reading
For more on how labor costs shape public budgets, see Remote Work.
Source note: This article includes information reported by Star Tribune.
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