Rochester City Council Approves $663.85 Million Budget, Tax Levy Increase

Rochester, MN (KROC-AM News)- The Rochester City Council has approved the city’s next budget. 

See Also: Rochester Launches Minnesota's First Geothermal Energy Network 

Councilmembers adopted the 2026-27 budget during their meeting on Monday night. The approval followed a public hearing. 

The budget covers operating costs and capital improvement projects. It also includes an increase in the property tax levy for next year. 

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Rochester City Council Approves Tax Levy Increase, 2026-27 City Budget

The city council signed off on a 5.9% tax levy increase to bring the tax levy up to $118.2 million to help fund the $663.85 million budget. 

A news release announcing the budget approval says the levy increase will not drive everyone’s property taxes up and that the “projected local tax rate change is 0.16%. The impact on individual property owners will vary based on property value, classification and overall tax base growth.” 

The tax levy hike is nearly half of the 10.68% increase approved for the $719,842,871 2025 budget. 

Rochester officials point out the 5.9% growth in the city’s property tax levy is below the statewide average city levy increase of 8.6%. 

See Also: Minnesota Property Tax Collection to Rise by Nearly $950 Million Next Year 

Next year, $417.7 million is earmarked for operations, $220.1 million is dedicated for capital improvement projects and $26.1 million will go towards debt servicing. 

City leaders also approved a 6% increase in electric rates and 9% hike in water rates for the Rochester Public Utilities budget. 

“The adopted budget supports the core services residents expect and depend on including police, fire and the maintenance of our roads, parks and winter snow removal operations,” said City Administrator Alison Zelms.