Mayor Kaohly Her is proposing an $887.8 million operating budget for St. Paul in 2027 that would increase the property tax levy 6.8% while cutting or reallocating $11.3 million in existing spending at the city.

Her, who delivered her first budget address Aug. 13, said the proposal is designed to close the city’s budget gap while more accurately accounting for recurring expenses that have previously been left unbudgeted or supported with one-time money.

The plan includes $438 million in general fund spending and represents a net increase of about $500,000 after reductions and new investments. The proposed property tax levy would total $248.3 million, with the city estimating an annual increase of about $58 for a median-value St. Paul home.

“I have always been honest with residents that we would not be able to reduce property taxes in the near term,” Her said during her address. “We can grow the tax base over the next few years so the cost of providing essential services is shared more broadly.”

Her said closing the projected gap through property taxes alone would have required a levy increase of more than 12%.

“Limiting that increase to 6.8 percent was the most responsible outcome we could achieve while protecting the services residents depend on and laying the groundwork for a stronger financial future,” she said.

The increase would follow a 5.3% levy increase adopted for 2026. The current city budget totals about $883 million, including a $404.9 million general fund and a $232.5 million property tax levy. The 2026 increase was estimated to cost the owner of a median-value home about $107 annually.

City officials say St. Paul’s continuing financial pressure stems from rising costs, declining commercial property values and state and federal support that has not kept pace. Local Government Aid accounts for nearly 20% of city operating revenue, but officials say it never fully recovered from cuts made in the early 2000s. Falling downtown commercial values have also shifted more of the tax burden to homeowners and small businesses.

Her said the proposed budget centers on four priorities: making it easier to do business, creating a more responsive government, enhancing safety and justice and improving long-term fiscal sustainability.

Among the proposed investments are $1.1 million for deferred maintenance, more than $2.3 million for police and emergency medical services academies and a 200% increase in climate-resilience investments. Her also proposed cutting her own compensation by $20,000 and freezing 2027 pay increases for the three highest-paid employees in her office.

The proposal also includes service reductions that are already drawing concern from City Council members. Her proposed closing the Dayton’s Bluff Library because of low use and rising rent, reducing recreation center hours and reducing the Police Department’s staff from 616 to 605, primarily through supervisory positions.

Council President Rebecca Noecker said in video posted to social media that she has “some serious concerns” about the proposal, citing the levy increase, Dayton’s Bluff Library closure, reduced Edgcumbe Recreation Center hours and a roughly $2 million reduction in Fire Department spending.

“We all know St. Paul has a budget gap, but it doesn’t have to be this way if we were getting the help that we need from the county and the state,” Noecker said..

Councilmember Saura Jost has also noted the effects of reduced recreation center hours while welcoming continued spending on deferred maintenance and climate initiatives. She said on social media she was “relieved we are not discussing deeper cuts to staffing or major reductions in services,” while acknowledging the effect the proposed changes could have on residents.

Residents will have several opportunities to weigh in before the council adopts a final budget.

Upcoming budget meetings with City Council members include Ward 5 on Sept. 10 from 6-7:30 p.m. at the North End Community Center; Ward 4 on Sept. 14 from 6-7:30 p.m. at Hancock Recreation Center; Ward 1 on Sept. 15 from 5:30-7 p.m. at Frogtown Community Center; and Ward 2 on Oct. 6 from 5:30-6:30 p.m. at Palace Community Center. Ward 3 will use its ongoing constituent outreach rather than hold a separate budget meeting.

The council is scheduled to vote on the maximum property tax levy Sept. 23. A Truth-in-Taxation public hearing is scheduled for Nov. 30, followed by a Dec. 2 vote on the final levy and 2027 budget.

Learn more:

Find the full budget proposal and watch the Mayor’s address at stpaul.gov/departments/financial-services/saint-pauls-budget/2027-proposed-budget.

Learn more about upcoming budget engagement opportunities at stpaul.gov/department/city-council.