St. Paul mayor proposes 5.3% tax levy increase in 2026 budget

ST. PAUL, Minn. (FOX 9) - Saying the state’s capitol city is currently navigating "an array of pressures" both at the federal level and recovering from a significant cyberattack, St. Paul Mayor Melvin Carter has proposed a budget for 2026 that would increase taxes on city residents.

2026 St. Paul budget proposal

What we know:

Saying his most recent proposal includes "strategic reductions" with no layoffs, Carter’s budget totals $887 million, with a General Fund budget of $404.9 million.

If approved, it would amount to a 5.3% property tax levy increase from 2025, or $232.5 million in increased fund availability.

According to Carter’s office, the increase represents roughly $107 a year, or $9 a month more for residents who own a median value home.

Budget investments:

Within the budget includes increased investments in resident services, such as a $1 million one-time appropriation to "expand citywide treatment, response, and prevention efforts that recognize the urgency of the opioid and fentanyl crisis."

Another $1 million will be earmarked for "continued investment in cybersecurity enhancements for the city’s digital infrastructure."

The city’s Down Payment Assistance Program will also receive a $1 million funding boost, bringing it to a cost of $2 million annually.

The program offers potential homebuyers up to $40,000 through a 15-year deferred term loan at 0% interest to use toward the down payment or closing costs of a home within the city.

What they're saying:

"We began this year facing a $23 million deficit and unjust federal funding funding cuts… We're met between sort of a rock and a hard place. On one hand, we have upward pressure on all of our costs, all of our expenses, the same ones that impact all of our households… On the other hand, we have downward pressure on all of our revenues," Carter said during his budget address on Thursday. "Our 2026 budget was built around the goals of keeping our levy as low as possible, ensuring that we're able to keep our promises to our employees, and building the road upward from that rock and hard place."

Previous budget

Dig deeper:

In the previous budget cycle, Mayor Carter and council members were at odds over line-item vetoes that the council said it had overridden, but the mayor’s office said came past the deadline.

Ultimately, the budget approved raised property taxes by 5.9% — down from the 7.9% initially proposed before negotiations began.

For the owner of a median value of $275,000 St. Paul home, the 5.9% levy increase amounted to an additional $98 per year in city property taxes, before the addition of any county or Metropolitan Council budget increases.

The budget will be the first that newly elected council member Molly Coleman, who replaced former council president Mitra Jalali, will vote on.

St. Paul cyberattack update

The backstory:

Carter’s budget address was delayed for the city to respond to a July 25 cyberattack that rendered some city services unusable.

During his address, Carter mentioned the attack while praising the city’s staff for maintaining order during an unprecedented time.

"The scale and speed and professionalism of our response showed just how critical this effort was in restoring services, and how deeply committed we remain to protecting our employees and residents," Carter said, while noting the attack affected mostly payroll systems and never emergency services.

Carter said the additional $1 million investment within the budget would be to "finish the job… Restoring systems with stronger safeguards, expanding proactive cybersecurity defenses, doubling down on secure, transparent service delivery, and acting to protect the employees who may have had data released in that breach."

FOX 9 previously reported that more than 2,000 of the city’s 3,500 employees were required to change passwords and update devices through the city’s "Operation Secure St. Paul" after the attack.

Ramsey County tax increases expected

Big picture view:

Meanwhile, residents countywide are bracing for increased living expenses in the years ahead.

Ramsey County officials are proposing a 9.75% property tax increase for 2026 and a 7.5% hike for 2027.

The proposed budget totaling $929 million for 2026 – a 6.57% overall budget increase from the 2025 budget – would equate to an extra $22 a month on a median-sized home.

In 2027, the budget would balloon to $968 million, or a 4.2% increase from the 2026 level.

Staff reductions of 43 positions currently filled are included in the proposed two-year budget, most of which come via the closing of a detox center that officials believe is currently underused.

Public comment meetings will be held on Sept. 22 and Dec. 11, before the Ramsey County Board of Commissioners is scheduled to vote on its finalization on Dec. 15.