Letter to the Minneapolis Board of Estimate and Taxation on 2027 Levies
September 22, 2026
To President Brandt, Mayor Frey, and Minneapolis Board of Estimate and Taxation (BET) members:
I am writing as the Hennepin County Commissioner for District 2. Approximately 100,000 of my constituents are Minneapolis residents who will receive one tax bill based on our collective decisions.
The Mayor’s proposed 11.3% levy increase equates to $409 per year for the median-value homeowner. The County’s proposed 8.15% levy increase equates to $129 per year for the median-value Minneapolis homeowner. The combined impact of the City and County levy increases adds nearly $540 to the median Minneapolis homeowner’s 2027 bill — with over 75% of that coming from the City, even as the City proposes reduced services and layoffs, affecting neighbors who may then need additional County services due to loss of income or health insurance.
Our shared residents have consistently expressed concern about unsustainable levy increases, while simultaneously demanding that we protect the public goods and services they rely on: from libraries and elections, to HCMC and health services, to transit and climate, as well as human services and a wide range of public needs. And at your recent public hearing, more than 40 residents testified about the essential role of Minneapolis parks in their communities for youth and recreation.
As such, below are specific requests that I hope you all will consider with each relevant timeline:
1. Tomorrow on September 23, I ask the BET to set the Park Board’s maximum levy at its full 5.86% request.
The Park Board’s requested maximum levy was 5.86%, and the Mayor included 2.5% in the proposed budget — with no operational detail recommendations. It is not reasonable to provide only 43% of funding with no public discourse or operational planning.
The difference between the 5.86% request and the 2.5% placeholder is $3.1 million, roughly 1% of the City’s overall levy, which equates to 26 positions, maintained parks, and full recreation center hours. Since 70% of the Park Board’s operating budget comes from property taxes, there is no way to absorb such a cut with no discourse or notice.
2. For the next BET meeting on October 14, I urge the City to present numerical analysis on the effect of Minneapolis TIF decisions on all local levies: Minneapolis Public Schools, City of Minneapolis, and Hennepin County.
Tax increment financing (TIF) is an important part of this conversation because of its effect on the tax base. Captured value is subtracted from the taxable base that the City, the County, and Minneapolis Public Schools (MPS, or “Special School District No. 1”) all levy against — meaning, every dollar captured raises the rate paid by everyone else.
It is important to understand the multi-year effect of TIF decisions because of their direct impact on the levies for MPS, City, and County.
For example in 2024, TIF captured $20.4 million of the City’s $839.8 million in local net tax capacity (meaning this amount was removed from the tax base). TIF decisions and decreasing commercial valuation have a doubling effect for Minneapolis homeowners because the remaining burden falls more heavily on residential property taxpayers.
The presentation should publish information in accordance with the City’s policy (Section III.H of the City’s Tax Increment Financing Policy): The City must identify excess tax increment, recommend decertification of parcels or districts, and report captured tax capacity in both dollars and as a percentage of the total.
In transparency, I have raised this concern with the Mayor for nearly one year because I was concerned about the City’s bulk administrative action to modify the TIF plans for 59 districts. Last December, I raised this concern to the Council via letter because decisions that commit more tax increment over the life of a district make it less likely that tax value returns to the shared tax base.
3. As Councilmembers develop potential amendments in October, I request that the Council prioritize a larger ongoing contribution from the Minneapolis levy toward shelter operations, homelessness response, and services for unhoused neighbors.
Despite common association with the County, no government is statutorily required to fund shelter operations or other homelessness response. In January 2025 our family shelter system ran at 213% of its usual capacity, and the Point-in-Time count identified 427 people unsheltered in Minneapolis at the start of that year. And yet, Hennepin County is the only local government that consistently contributes to shelter operations.
The City of Minneapolis must establish ongoing funding from the City levy — in addition to one-time or pass-through funding — because levied funds are the most reliable means of ending homelessness and serving unhoused residents.
For example in 2025, City property taxes contributed $400,000 for street outreach and no ongoing funding for shelter operations. In 2025, County property taxes contributed nearly $14.4 million for the homeless crisis response system.
In transparency, I have previously expressed concern regarding the City’s portrayal of encampment evictions as included within homelessness response. Sheltering people costs far less than the emergency, enforcement, and hospital responses, so I ask that the City’s contributions become ongoing commitments (in addition to one-time and pass-through funds) — which is consistent with the Mayor’s exact argument in his budget address about the City’s own finances: ongoing costs require ongoing revenue.
4. Study and manage law enforcement overtime costs, don’t just budget for them. Being required by law to fund a service does not mean managing that service in a way that strains everything else residents depend on.
I see value in the Mayor’s plan to apply for a SAFER grant for a team of 15 floating firefighters, which is projected to save up to $2 million a year by ending the overtime cascade when one station covers another. That is the kind of creative solution that hard budget years require.
Minneapolis Police Department (MPD) overtime needs the same treatment, and the Mayor is the sole elected policymaker accountable to manage this service and spend.
The BET reported that MPD overspent its 2025 budget by $20 million — and $20 million equates to three levy points for the City, or roughly $110 per year for the median-value Minneapolis homeowner.
Even more MPD overtime is projected for 2026, with just $2.3 million allocated in the 2026 budget. The $13.1 million for MPD overtime in the Mayor’s 2027 budget is a more honest allocation, however still sits far below reality.
The Mayor has directed MPD to review every posted overtime shift and create a prioritization strategy. I ask that MPD present that review when the department appears before the Budget Committee on September 28.
I further ask that the Mayor write an overtime management plan and file it with the Budget Committee before markup begins on December 10 — it should name the drivers of the overspend, the reduction expected in 2027, and the schedule on which actual overtime will be reported against the allocation.
In transparency, the largest portion of the County’s unaccounted overages in recent years also resides within law enforcement. The County Board has worked with the elected County Sheriff over several years to formally study and publicly discuss these topics. Our collective law enforcement systems are interconnected and have material impacts on public trust and public safety outcomes.
Residents do not experience our actions and levies as separate decisions. They experience the total, which means the responsibility for keeping property taxes manageable is shared across every government whose levies make up that bill.
Minnesota Statute requires local governments to set a maximum levy this month, and the final levy and budget are approved in December. That leaves time to govern these decisions with transparency and informed decision-making. Taxes are the government word for revenue, and a levy is not just a number on a spreadsheet. Levies fund teachers, snowplow drivers, social workers, libraries, and emergency response. But I am concerned about asking residents for so much more while cutting the very services they are asking us to protect.
Thank you for your important public service, and I appreciate the seriousness with which I know you will consider my requests. I am eager to remain in direct communication in order to share our levy impact analysis and offer partnership. Hennepin and Minneapolis serve the same residents, and only shared data, open communication, and collaboration will get us through this together.
Sincerely,
Dr. Irene Fernando (PhD)
District 2 Commissioner
Delivered via email to President Steve Brandt, Minneapolis Board of Estimate and Taxation; Mayor Jacob Frey, City of Minneapolis; Vice President Eric Harris Bernstein, Minneapolis Board of Estimate and Taxation; Council President Elliott Payne, City of Minneapolis; President Tom Olsen, Minneapolis Park & Recreation Board; and Council Budget Chair Aisha Chughtai, City of Minneapolis. CC: Minneapolis City Council, Minneapolis Park & Recreation Board, Minneapolis Public Schools Board.