Overview: Frey proposes $2.3B budget to address looming deficit
Contributing writer Clint Combs reports on Mayor Jacob Frey's proposed $2.3 billion budget for Minneapolis. The breakdown highlights key measures to close a $60 million deficit, including proposed job cuts, property tax increases and expanded funding for police overtime, while examining critical pushback from City Council and Park Board leaders.
Credit: Clint Combs/MSR
Minneapolis Mayor Jacob Frey released a proposed $2.3 billion budget for 2027 on Aug. 12 that would cut 100 jobs, raise property taxes by 11.3% and set aside $13.1 million for the police department’s overtime fund.
“The cost of providing the services and the programs that our residents expect is growing faster than the revenue available to pay for them,” Frey said. “Emergency government cannot become permanent government.”
Minneapolis faces a budget gap that officials say could grow to nearly $60 million if left unaddressed. Inflation is driving up the city’s daily cost for basic services like road repairs and fuel for emergency vehicles. The city is bringing in less commercial tax revenue due to plunging downtown office values, and severe staffing shortages are forcing millions in spending on police overtime. The cutoff of pandemic-era federal aid has reopened a massive budget gap, leaving the city to choose between cutting essential services or raising taxes.
The debate over police overtime allocations
The 2026 budget earmarked $2.3 million for the Minneapolis Police Department’s overtime fund. The city has spent at least $20 million a year on overtime since 2022.
Ward 8 City Councilmember Soren Stevenson has criticized the department’s spending pattern. “The department has also been surpassing its budget by $20-30 million a year,” Stevenson wrote in an op-ed. “This kind of overspending is the result of leadership rolling over to the demands of the police union, not from real public safety needs. Issues like uncontrolled police overtime could be addressed by better management, but instead we accept it as a given.”
Frey defended the overtime budget as a necessary expense for an understaffed police department.
“Overtime is part of how we meet those responsibilities. You may not like the spending on overtime, believe me, neither do I. But we have to do it,” Frey said. “The bad news is that the 2026 allocation of 2.3 million dollars doesn’t come anywhere close to meeting the true cost, and so our overtime allocation of $13.1 million is a transparent attempt to correct the mismatch by aligning our financial plan with our department’s operational reality.”
Even as the budget leans heavily on cuts, Frey did label some housing programs as untouchable.
“While most of this budget has focused on cuts, stable homes, stable schools will not be,” Frey said. “This program has helped improve children’s physical and mental health, has kept them out of homelessness and in school. We will continue to fund this critical program, which has demonstrably helped stabilize families.”
Frey’s proposal also includes cutting $2.6 million from the violence interrupter program.
Proposed service consolidation meets park board pushback
One of the more contentious pieces of the proposal is Frey’s push to combine HR, IT and payroll systems between the city and the Minneapolis Park and Recreation Board. “I value the independence of the park board, but not all functions are necessarily essential to that independence between the city and park board,” Frey said. “We don’t need two HR systems, two IT systems, two payroll systems.”
Park Board Commissioner Tom Olsen rejected that argument.
“I have not seen enough evidence that consolidation would lead to any savings for Minneapolis residents without seriously hurting the service level quality for MPLS residents,” Olsen said. “Everything we have seen indicates that the city would not be able to handle our HR. If the Mayor/city thinks they can take on our HR needs, then I would argue they have too many FTEs in HR.”
Olsen also disputed the mayor’s proposed 2.5% levy placeholder for the Park Board, well below the 5.86% increase the board requested.
“Our 5.86% ask is the bare minimum needed to maintain current service levels,” Olsen said.
Commissioner Dan Engelhart called the city’s work on the Park Board’s books unproductive.
“IT has unique needs given the information the public looks to in order to find our wildly popular programming and park access. We were hacked and having in-house IT able to move quickly was vital. Working with the city on payroll as is, is already tremendously inefficient,” Engelhart said. “Our 5.86 levy was well thought out and absolutely needed to maintain what the residents expect and deserve, as well as so clearly can see as a positive use of tax dollars.”
Next steps in the budget process
The City Council’s Budget Committee begins its review Aug. 24, with department presentations running through late October. The Board of Estimate and Taxation is set to adopt a maximum levy Sept. 23. The Truth in Taxation public hearing and final Council budget vote are expected Dec. 15, following markup sessions earlier in the month.
For more information on the budget, visit www.minneapolismn.gov/government/city-council/committees/budget/.
Clint Combs is a freelance journalist and contributing writer for the Minnesota Spokesman-Recorder. He welcomes reader responses at combs0284@gmail.com.