St. Paul, MN – Facing a challenging fiscal landscape compounded by federal pressures and a recent significant cyberattack, St. Paul Mayor Melvin Carter has proposed the city’s 2026 budget that notably includes a 5.3% increase in property tax levy. This proposal is designed to address critical city needs while navigating financial constraints without laying off any employees.
The proposed budget totals $887 million, with a General Fund budget of $404.9 million. If approved, the tax levy increase would translate to approximately $107 more per year, or $9 per month, for owners of median-valued homes in the city, helping fund enhanced municipal services and crucial programs.
Balancing Fiscal Challenges and Strategic Investments
Mayor Carter emphasized the complexity surrounding the city’s finances, referencing a $23 million deficit and cuts in federal funding that have tightened revenue streams. Despite these pressures, the budget incorporates “strategic reductions” aimed at maintaining staffing levels while boosting funding in key areas.
Key budget investments include:
- A $1 million one-time appropriation to expand treatment, response, and prevention efforts targeting the urgent opioid and fentanyl crisis.
- A dedicated $1 million investment in cybersecurity enhancements to strengthen the city’s digital infrastructure following a recent cyberattack.
- A $1 million boost to the Down Payment Assistance Program, doubling its funding to $2 million annually. This program supports prospective homebuyers with up to $40,000 in a 15-year, 0% interest, deferred loan for purchasing homes within St. Paul.
“Our 2026 budget was built around the goals of keeping our levy as low as possible, ensuring that we’re able to keep our promises to our employees, and building the road upward from that rock and hard place,” Mayor Carter explained during his budget address.
Reflecting on Previous Budget Cycles and New Council Dynamics
The proposed increase follows the 5.9% property tax levy hike in 2025, which was slightly reduced from the initial 7.9% proposal after negotiations. That increase translated to an almost $98 yearly tax increase for owners of homes valued at around $275,000 as reported.
This upcoming budget will also be the first major fiscal proposal voted on by newly elected city council member Molly Coleman, who succeeded former council president Mitra Jalali.
Responding to the City’s Cyberattack
In July 2025, St. Paul experienced a significant cyberattack that disrupted city services, primarily affecting payroll systems, though emergency services remained operational. The attack led to mandatory password resets and device security updates for over 2,000 city employees as part of the “Operation Secure St. Paul” response.
Mayor Carter praised city staff for their rapid and professional response, highlighting the critical importance of restoring trust and functionality to digital services.
Budgeted cybersecurity funds will be used to:
- Complete restoration of compromised systems with enhanced safeguards.
- Expand proactive cybersecurity defenses.
- Ensure secure, transparent service delivery.
- Protect employees potentially affected by data breaches.
“The scale and speed and professionalism of our response showed just how critical this effort was in restoring services, and how deeply committed we remain to protecting our employees and residents,” Carter stated.
Ramsey County’s Broader Tax Increases and Budget Outlook
St. Paul residents will also experience rising costs as Ramsey County officials propose a 9.75% property tax increase for 2026 and a further 7.5% hike in 2027. The county’s proposed 2026 budget stands at $929 million, marking a 6.57% rise from 2025, adding roughly $22 monthly in property taxes on median-sized homes.
The county’s plan includes:
- Staff reductions totaling 43 positions.
- A closure of an underused detox center to streamline spending.
- Public comment meetings scheduled for September 22 and December 11, with final voting slated for December 15.
Looking Ahead
With pressing public health challenges and heightened cyber threats, Mayor Carter’s budget proposal for 2026 underscores the city’s commitment to investing in essential services while balancing fiscal responsibility.
Residents face the reality of increased taxes but stand to benefit from enhanced public safety efforts, improved digital infrastructure, and expanded housing assistance.
Key takeaways for residents:
- Anticipate an average increase of $107 per year in city property taxes under the new levy proposal.
- Expect proactive investments addressing the opioid epidemic and cybersecurity vulnerabilities.
- Benefit from the expanded Down Payment Assistance Program supporting local homeownership.
What do you think about this budget proposal and the proposed tax levy increase? Have you been affected by the opioid crisis or cyberattack in St. Paul? Share your thoughts in the comments below!
