98 Minnesota mayors warn state spending, fraud and unfunded mandates are forcing property tax hikes
Ninety-eight Minnesota mayors sent a December 22, 2025 letter to Governor Tim Walz and lawmakers, warning that alleged fraud, unchecked spending and unfunded mandates are forcing cities to raise property taxes, cut services and delay projects statewide.
Key takeaways
- Who: 98 Minnesota mayors signed the letter, including leaders from Crosslake and Stewartville, and more than half a dozen Northland cities; reporting cited WDIO and KAAL.
- Why it matters: The mayors point to a swing from an $18 billion surplus to a projected $2.9–$3 billion deficit for 2028–29 and preliminary 2026 property tax increases of nearly $950 million (a 6.9% rise).
- State response: The Walz administration highlights record local funding — including $300 million for police and fire, large infrastructure budgets and direct property tax relief — while Republican lawmakers urge spending cuts and investigations.
What the mayors said
The letter, authored by Crosslake Mayor Jackson Purfeest and released December 22, outlines what local leaders say are immediate pressures on municipal finances. In the letter the mayors write:
“As mayors, we see firsthand how these decisions ripple outward. Fraud, unchecked spending, and inconsistent fiscal management in St. Paul have trickled down to our cities—reducing our capacity to plan responsibly, maintain infrastructure, hire and retain employees, and sustain core services without overburdening local taxpayers.”
The mayors cite specific pressures:
- Rising operational and construction costs that stretch municipal budgets.
- Workforce shortages leaving vacancies in police, fire, public works and other essential services.
- Slower private investment as businesses hesitate to expand.
- Outmigration as families choose lower-tax or perceived-better-service areas.
State fiscal picture and the tax impact
The mayors point to a rapid deterioration in Minnesota’s fiscal outlook: what was once an $18 billion surplus has been replaced by a projected $2.9–$3 billion deficit for the 2028–29 biennium. They also cite preliminary estimates showing nearly $950 million more in property taxes statewide for 2026 — a 6.9% increase over 2025. These figures are presented as early warning signs for cities balancing constrained revenues and unpredictable state aid (WDIO).
Responses from state officials
The Walz administration disputed the mayors’ framing and pointed to recent investments intended to support local governments, including:
- $300 million for police and fire services.
- Historic infrastructure budgets and flexible local aid.
- Dedicated funds for lead service line removal and health projects.
- Direct property tax relief aimed at homeowners and businesses.
The administration argues these steps represent record support to help slow local tax growth (KAAL).
Political reaction
Republican lawmakers framed the mayors’ letter as validation of longstanding concerns about state spending. Senator John Lang and GOP leaders praised the letter, called for tighter spending controls, investigations into alleged fraud, and urged fewer unfunded mandates on cities (Minnesota Senate Republicans).
The evolving fraud discussion
The letter names “fraud” as a root concern. That claim has broadened public debate and comment from figures such as Minnesota State Senator Michael Kreun, Townhall columnist Dustin Grage and former federal prosecutor Joe Teirab. At present, media coverage documents the mayors’ allegation but does not present new, independently verified public evidence tying large-scale fraud directly to the statewide budget swing. Journalistic standards emphasize that clear evidence is required before attributing specific fiscal losses to fraud; investigations and hearings may provide more detail.
Unfunded mandates and local budgets
A central complaint is that the state imposes responsibilities without adequate funding — the classic unfunded mandates problem. The mayors identify areas such as K–12 education, health and human services, and public safety where state expectations outpace local revenue. They argue these mandates force local officials to choose among raising property taxes, reducing services, cutting staff or delaying projects (WDIO).
Implications for San Diego
Minnesota’s experience offers several lessons for San Diego officials and residents:
- Budget planning: Emphasize multi-year budgeting, reserve funds and scenario planning to handle sudden state fiscal shifts.
- Property tax risk: Even with different rules, changes in state funding can push local governments to seek alternative revenue or cut services.
- Political and social effects: Public frustration over taxes and services can shape elections, workforce stability and migration patterns.
- Intergovernmental coordination: Early engagement with state lawmakers can help secure fully funded mandates or useful flexibility.
Sources and further reading
Reporting note
Reporting note: The mayors’ letter and related coverage raise claims about fraud, unchecked spending, unfunded mandates and shifting state reserves. Public reporting to date documents the letter and the fiscal numbers cited by signers, but specific, independently verified evidence tying particular instances of fraud to the budget swing was not found in the referenced reporting. Future investigations and hearings may add detail (WDIO; KAAL; Minnesota Senate Republicans).
