Property taxes a major focus of Frey address

Dan Netter//May 8, 2024//

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Dan Netter//May 8, 2024//

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During his annual state of the city address, Minneapolis Mayor Jacob Frey addressed an issue that has been speculated upon since the start of the pandemic recovery but confirmed earlier this year with the release of the Minneapolis city assessor’s report to the Budget Committee: Property tax receipts have fallen for office buildings, leading to a budget shortfall.

“Here’s the reality: Budgeting will look different this year,” Frey told a crowd on Tuesday. “This is not the year to add shiny new programs; it’s the year to effectively carry out the ones we have.”

Frey said that the budgeting process is starting with a levy increase of 6.1%. He said the “big factor” is downtown valuation. According to the report, which Finance & Commerce originally reported on in March, commercial properties were worth a collective $13.2 billion in 2023 and decreased to being worth $12.1 billion in 2024.

Frey said having fewer workers downtown is leading to lower values on buildings. Lower values in turn lead to decreased property taxes. A few buildings together, he said, generate as much property taxes as other wards in their entirety, and he called for a renewed urgency around examining property tax issues.

“I know for some property taxes have not been at the forefront of political discourse over the last several years and that needs to change,” he said.