City Administrator Alison Zelms will present the recommended 2026–2027 Operating Budget to the City Council on Monday, August 25. The $663.85 million proposal includes a 5.9% increase in the levy amount needed to support essential services and long-term financial stability. This change is significantly less than the 10.68% projected in the city’s 2025 financial plan.

An increase in the amount levied does not mean everyone’s property taxes will rise by 5.9%. For taxes payable in 2026, property values in Rochester rose by 6.58%, with new construction making up 1.77% of that growth. 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. Residents can learn more by watching this short video: How your Property Taxes are Calculated.

The City utilizes a two-year budget cycle that promotes long-term planning and financial stability. The extended timeframe encourages proactive problem-solving rather than reactive decision-making, and it provides the flexibility to realign resources as community needs evolve

Budget Highlights

• Public Safety and Services: More than half of the City’s general fund (56.2%) will support police, fire and emergency services, ensuring safety remains a top priority.
  
  
• Community and Economic Investments: Continued funding for partners such as RNeighbors, 125 Live, the Rochester Art Center, Rochester Civic Theatre, Olmsted History Center, and the Rochester Downtown Alliance to strengthen neighborhoods and contribute to community vitality.
  
  
• Planning for Growth: With $331 million in new construction in Rochester last year, the City is preparing infrastructure to meet the needs of a growing community.
  
  
• Utilities and Infrastructure: Rate adjustments are proposed to maintain reliable water, sewer, and electricity systems. For the average household in 2026, these adjustments are estimated at approximately $2 per month for water, $6 per month for electricity, and a small increase for sewer.

• Fiscal Responsibility: The City works hard to make sure tax dollars are used wisely. Cost-saving steps helped cut nearly $4 million from the 2026 budget, which significantly reduced the anticipated tax increase. Most of the increase that remains is due to employee contracts, rising prices and new state requirements like Paid Family Medical Leave.

• Continuous Improvement: The fiscal responsibility efforts allow us to adapt to evolving community needs and incorporate investments and resources that align with strategic priorities and deliver meaningful value to residents ensuring a more inclusive and vibrant community for all.

“Rochester residents count on reliable services, safe neighborhoods and a strong local economy,” said City Administrator Alison Zelms. “This budget is built around those expectations. It strengthens public safety, invests in the services people rely on every day, supports our community partners and plans responsibly for Rochester’s future.”

Next Steps in the Budget Process

• August 25, September 3 & September 15, 2025: City Administrator presents the recommended budget to the City Council
  
  
• September 22, 2025: City Council sets the maximum tax levy
  
  
• December 1, 2025: Public hearing and adoption of the final 2026–2027 budget and levy

More Information
Past budget documents are available on the City of Rochester website. City Council meeting dates, times and agendas are also available on the City’s website.