Frey’s $2.3 billion budget plan includes the biggest property tax hike in at least 26 years.
The gap comes from higher labor and operating costs, the end of one-time federal pandemic money, and lower downtown commercial property values.
City data shows downtown commercial values have dropped for years, shifting more of the tax burden onto residential properties.
Federal prosecutors have said half or more of roughly $18 billion in federal funds for 14 Minnesota-run programs since 2018 may have been stolen, with many cases involving daycare, home health, and related schemes.
The mayor also plans to cut around 100 positions and reduce some programs.
Mayor of Minneapolis, Somalia Jacob Frey announces property tax increases on American homeowners
This new property tax increase of 11.3% on homeowners will be used to close their budget shortfall
This is the same mayor who’s allowed billions in fraud to be stolen by Somali… pic.twitter.com/LryxXB4B3d
— Wall Street Apes (@WallStreetApes) August 16, 2026
Twin Cities metro was named the most distressed commercial real estate market in the nation in mid-August reporting.
Federal and state actions in July continued to freeze or review hundreds of millions in Minnesota Medicaid payments over fraud concerns.
Additional defendants and sentences in Feeding Our Future and related Medicaid cases kept coming through June and July.
Downtown office values remain under heavy pressure, with assessors noting multi-year declines that force more of the levy onto homes.
Mayor Frey delivers 2027 budget address
Minneapolis mayor proposes budget cuts, layoffs and 11.3% tax increase