Property taxes in Minneapolis have seen double-digit increases year after year, yet city employee salaries are rising as though the local economy is booming. It isn’t. Minneapolis currently has the highest number of distressed commercial loans of any city in the country. According to a recent report by CRED iQ, the distress rate for the Minneapolis-St. Paul metro has reached 55.2 percent.
The risk to residents is that more of these loans could fail, pushing property values down further than they’ve already fallen. Over the next several years, that could mean even larger tax increases to cover the lost revenue. In his August 25 commentary in the Star Tribune, Mayor Frey said he wants “to keep finances stable while not kicking the can down the road,” describing his budget as making “the hard choices now” to get the city through what he called a “two-year ring of fire.” What Frey didn’t mention is that his proposal still raises total spending by about 5.3 percent, according to Ag Cohen of the Minneapolis Times.
The proposed 2027 budget doesn’t make the difficult choices the moment calls for. One of the biggest cost drivers is employee salaries, and not just at the MPD. (We’re redacting employee names in this newsletter. The point isn’t to single out individuals, but to illustrate a frustration many residents share.)
A reader sent me this research after my interview with Tom Olsen, president of the Minneapolis Park and Recreation Board.
Comparing salaries for the same job titles from 2019 to 2025, the reader found increases often well over 100 percent. The top example: an employee with the title “Police Sergeant Parks P” went from $89,631 in 2019 to $206,697 in 2025, an increase of more than 130 percent in six years. A “Police Officer Parks B P” went from $75,199 in 2020 to $158,707 in 2025, up 111 percent in five years. An “Environmental Education Lead P” earned $63,807 in 2019 and $117,115 in 2025, an increase of 83.5 percent.
These are presumably all capable employees doing their jobs well. But ordinary residents and taxpayers in Minneapolis haven’t seen anything close to these salary increases. The reader noted that the examples above are closer to the rule than the exception, and encouraged others to look through the data themselves. That growth deserves a place in the budget conversation, given how much taxpayers have absorbed from local government expansion over the past six years.
We ran our own search on GovSalaries.com and found similar patterns. In 2024, a Police Lieutenant earned $492,117, well above the City Operations Officer’s $318,767. An Assistant City Coordinator for Convention Center operations earned $251,939, which the site put at 431 percent above the city’s average salary and 1,538 percent above the median. Another employee, an Assistant City Coordinator and Chief Finance Officer, earned $228,870 in 2024, up $40,062 (21.2 percent) from 2023 and up $54,138 (31.0 percent) since 2020.
The Ugly Budget Battle Ahead
The budget proposal is being pitched as a fiscally responsible way to steward the city through the next two years. Until we see a report with 2026 data that’s transparent about salary growth over the past five years, we remain skeptical. Closing unfilled positions and shuffling departments are marginal changes that don’t alter the underlying trend of continued growth in city government, a trend being financed by resident property taxes even as a potential financial storm builds offshore.
Good governance calls for strategic scenario planning. What happens if a significant share of those commercial loans default? If city revenue from commercial property keeps falling, what’s the plan? What does the best case look like? Is there any realistic scenario in which residents see their property taxes go down?
As an outside observer, it’s hard to know what to believe. Different camps are projecting their own priorities onto the budget without giving enough weight to the underlying conditions and assumptions driving it. It’s not exciting to think about the yield on the 10-year Treasury, but governing is often unglamorous work. The city needs a government that’s prepared for a sharp rise in interest rates and loan defaults; having a plan in place could be what keeps those risks from materializing.
Watching the various factions defend their predictable positions doesn’t build much confidence. We’d rather see some wonky mathy people dig into the numbers and find a solution that doesn’t keep relying on a heavier tax burden for residents.
