The Fridley City Council held its annual Truth in Taxation hearing Dec. 8, using the meeting to present the 2026 budget and gather public feedback on the city’s proposed levy increase.
Finance Director Joe Starks said the city’s budget objectives include funding high-quality public services at a fiscally responsible cost, stabilizing ongoing revenues and expenditures, minimizing unanticipated variances and maintaining structural balance and appropriate reserves. He said the city also aims to make best use of existing resources, plan for long-term “peaks and valleys” in spending needs and ensure accountability and transparency throughout the budgeting process.
Fridley’s final levy increase for 2026 is 5.92%, down from the previously proposed 6.29%, Starks said. A median-value home in Fridley, estimated at $296,400, could see an annual tax increase of $139.
Starks said that for taxes payable in 2026, 47% of Fridley’s net tax capacity comes from commercial/industrial properties, 35% from homestead residential, 17% from non-homestead residential and 2% from railroad/public utility. He reported that total tax capacity decreased 1.29%, and that the tax burden shifted toward homestead residential, increasing the average homeowner’s taxes by about $51 per year.
Using Anoka County data, Starks said the average residential value rose from $271,100 to $278,600 (a 2.77% increase), while the median rose from $288,900 to $296,400 (a 2.6% increase).
A significant factor again in 2026 is fiscal disparities. Starks said Fridley remains one of Minnesota’s largest contributors, losing a net $4,059,565 to the program after contributing $10,482,780 and receiving $6,783,215 back. When accounting for fiscal disparities, the city’s tax capacity decrease rises from 1.29% to 1.76%.
Starks noted that Minnesota’s projected state budget surplus for fiscal year 2026–27 is $2.465 billion, down sharply from $3.7 billion the previous year and $17.5 billion in 2024. Inflation, while slowed, remains a factor at 3% as of September 2025.
Budget assumptions include wage and benefit obligations under four public safety labor agreements, progression through the city’s compensation plan, market adjustments and the addition of a new step in the compensation schedule. Health insurance increased 12% in 2025 and has no cap for 2026 under a negotiated RFP. The budget also incorporates Minnesota’s paid family leave requirements, two elections and removal of 2025 one-time items.
Personnel services make up 77.99% of general fund spending, consistent with previous years. For 2026, personnel costs increase $1,169,600, or 6.13%, compared to the adopted 2025 budget.
The general fund includes:
Local government aid is projected to fall $175,300, while the budget includes increases in affordable housing aid (+$176,500), police aid (+$85,000) and Municipal Maintenance Aid (+$47,500). LGA accounts for 2.92% of general fund revenue; intergovernmental aid as a whole accounts for 11.31%.
Starks said the levy supports wage and benefit obligations, operational cost pressures and debt service for the Civic Campus and Park Service Improvement Plan. The 2026 levy is $22,960,400, up from $21,677,595 in 2025.
Between 2024 and 2025, the median homestead value increased 2.6%. Under the new levy, a $296,400 homestead could see an $139 annual tax increase—an 11.2% jump. Of that, $51 stems from the tax base shift, Starks said.
Fridley’s 5.92% levy increase remains below the 7.91% average among comparable cities, according to his presentation.
Council Member Ryan Evanson asked whether changes in health insurance costs were the primary reason the final levy increase dropped from the preliminary figure. Starks confirmed that this was the main factor.
Evanson also asked whether Fridley was effectively losing more than $4 million through fiscal disparities. Starks said yes, calling it “essentially a tax base redistribution.”
“Those that have a higher commercial and industrial tax base per capita, although not always the case, they’re losing more tax base than they’re bringing back in,” Starks said.
Council Member Luke Cardona noted that Starks had presented the budget multiple times and that council members had ample opportunity to ask questions.
During public comment, Natividad Seefeld, president of Park Plaza Cooperative, asked how manufactured housing was classified. Mayor David Ostwald said it is categorized as multi-family residential.
One resident and his father said their city tax portion rose 19.5%, estimating their home value near the city median. They were referred to the city assessor. Evanson asked whether this increase was tied to the shift in tax burden and changes in 2026 valuations. Starks said residential homestead is seeing larger increases in part because more heavily taxed property classes are decreasing.
“Which then with fiscal disparities almost doubles it,” Starks said.
Another resident said her taxes increased $1,022, citing a reduced homestead exclusion.
Starks added that Fridley’s overall net tax base decreased. “So holding all else aside, even if the city didn’t reduce our levy, our tax rate would have gone up because of that,” he said. “And so that’s why, when you look at the dollar change year over year, that’s why it’s higher than the 5.92% as well.”
Evanson said the past year had been difficult for residents and that state-level budget issues were now affecting cities. “Particularly programs like fiscal disparities,” Evanson said. He called Fridley a “loser” in the system and said other cities would lobby to preserve it. He added that it would help if residents expressed opposition as well.