MINNEAPOLIMEDIA NEWS | Minneapolis Faces $33 Million Budget Gap as More Than 100 City Jobs Could Be Cut

Minneapolis Mayor Jacob Frey is preparing a 2027 budget proposal amid an estimated $33 million shortfall that could result in more than 100 city job cuts, department restructuring and another significant property-tax increase. The proposal, expected Wednesday, will force City Hall to confront how much government residents can afford and which services it can continue providing at current levels.

MINNEAPOLIS, MN (August 9, 2026). Minneapolis residents could face the uncomfortable combination of higher property taxes and reduced city staffing next year as Mayor Jacob Frey prepares to unveil a 2027 budget proposal designed to close an estimated $33 million gap.

More than 100 city employees could lose their jobs under potential reductions being considered as City Hall confronts growing expenses and financial pressures. Some departments or divisions could also be consolidated or eliminated.

Even after those reductions, Minneapolis taxpayers could face another substantial property-tax levy increase.

Frey is scheduled to present his recommended 2027 budget Wednesday, August 12. Until then, individual reductions remain proposals rather than an adopted city budget, but the scale of the problem is becoming clear.

A $33 MILLION GAP

Minneapolis has spent recent years attempting to control levy increases while maintaining police, fire, public works, housing, regulatory, health and other municipal services.

The financial environment is becoming increasingly difficult.

Commercial property values, particularly downtown office values, remain a major concern because declines can shift a greater portion of the property-tax burden onto other property owners. Personnel costs continue rising.

The city is also implementing expensive public-safety reforms and maintaining infrastructure while navigating uncertainty surrounding federal support.

The result heading into 2027 is a projected gap of approximately $33 million.

Closing a deficit of that size requires more than trimming office supplies. That is why layoffs have entered the discussion.

WHAT SERVICES COULD CHANGE?

That is the question residents should watch when Frey releases the full proposal.

A government position is not merely a line on a spreadsheet. City employees inspect buildings, answer emergency calls, maintain streets, process permits, respond to residents, administer housing programs, manage public-health responsibilities and support police and fire operations.

Not every eliminated position necessarily produces an immediate reduction in public service. Some responsibilities can be consolidated, vacancies can remain unfilled and programs can be reorganized.

But Minneapolis should clearly identify which services residents can expect to receive differently if substantial staffing reductions are adopted.

TAXES COULD STILL RISE

Perhaps the most difficult political aspect of the coming budget is that workforce reductions may not prevent another significant tax increase.

That puts homeowners, landlords, renters and businesses in a difficult position.

Residents may reasonably ask why taxes could increase substantially while the workforce simultaneously shrinks.

Property taxes are also not paid only by homeowners. Landlords can incorporate rising property expenses into rents, while businesses facing higher occupancy costs can pass portions of those expenses to customers or reconsider investments.

That makes the 2027 budget an affordability issue as much as a government-finance issue.

WEDNESDAY WILL MATTER

The mayor's August 12 presentation will begin the public phase of a much longer budget process.

The mayor recommends a budget, and the City Council reviews, debates and modifies it before final adoption.

That means none of the possible layoffs or department changes should be treated as final today. But Minneapolis residents should pay attention now.

Which jobs would disappear? Which services would change? How large would the proposed levy increase actually be? What alternatives were considered? And how much of the $33 million problem is temporary versus structural?

Budgets are where political promises eventually encounter arithmetic. On Wednesday, Minneapolis will begin seeing the arithmetic.

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