Minneapolis Budget Committee Meeting - June 8, 2026

The Budget Committee of the Minneapolis City Council met on Monday, June 8, 2026, to approve a staff direction to research a potential Payment in Lieu of Taxes (PILOT) program and to receive a detailed presentation on the estimated revenues and expenditures for the 2027-2028 biennial budget. The meeting was chaired by Councilmember Aisha Chugtai.

Consent Calendar

• Approval of a walk-on agenda item to accept a gift for Interim Deputy City Operations Officer Katie Topinka to attend the Strive Together 2026 Policy Summit and City Accelerator Cohort Meetings. Approved unanimously.

Discussion Items

• Research into a Potential PILOT Program: Councilmember Wandsley introduced a staff direction to research a voluntary Payment in Lieu of Taxes (PILOT) program, citing a report from the Guy House that estimated the city could generate between $10 million and $19 million annually from entities such as higher education, healthcare, and cultural institutions that do not pay property taxes but receive city services. Councilmember Warren raised concerns about potential cost impacts on families paying tuition to these institutions. Wandsley clarified the program would be voluntary and not a new tax. The motion passed unanimously.
• 2027-2028 Current Service Level (CSL) Budget Presentation: Budget Manager Justin Carlson, Deputy CFO Jane DeSenza, and Principal Analyst Ben Zimmerman presented the CSL calculations. Key points included:
  • General fund expenses are projected to increase by 5.1% while revenues increase only 1.9%, creating an estimated gap of $28–33 million.
  • Personnel costs are increasing by nearly $36 million, driven by COLA, step increases, and rising health insurance premiums.
  • Internal service charges are up $9.2 million due to inflation and new facilities.
  • The property tax levy was planned to increase by 5.4%, but the gap may require a larger levy or other measures.
  • Local option sales tax (LOST) revenues are plateauing, and the downtown assets fund transfer to the general fund is becoming less sustainable.
  • Non-levy revenues are forecast to contract modestly, with interest earnings down $5 million due to lower fund balances.
• Council Questions and Discussion:
  • Council President Payne noted the gap is substantial and requested historical comparison data. She also questioned the allocation models for internal service charges and the forecasting of overtime, particularly for police and fire.
  • Councilmember Wandsley pressed for an update on the fee study passed two years ago; staff indicated the study is still underway with results expected in two months.
  • Councilmember Rainville asked about a drop in sales tax revenues; staff offered to provide written clarification.
  • Vice Chair Schaefer asked about the leverage points for closing the gap; staff highlighted concerns about fund balance and overtime management.
  • Councilmember Stevenson inquired about budget deviation authorities; staff and council members discussed the role of the mayor and recent financial policy changes to strengthen council oversight of budget amendments.

Key Outcomes

• Approved (unanimous): Staff direction to research a PILOT program.
• Approved (unanimous): Consent calendar item for gift acceptance.
• The committee received and filed the 2027-2028 CSL budget presentation. The budget process will continue with the mayor's recommended budget in August, followed by formal transmission to the council in September.