Rochester City Council Sets Preliminary Budget, Tax Levy Increase for 2026 Budget

Rochester, MN (KROC-AM News)- The Rochester City Council has set the maximum increase for next year’s budget. 

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A news release issued by the city Monday evening says the increase could fall before the elected leaders give the budget final approval near the end of the year. 

Council members voted to set the maximum tax levy increase on Monday. 

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Rochester City Council Approves Over $663.9 Million Budget for 2026, Tax Levy Increase

The city council approved a preliminary 5.9% tax levy increase to bring the tax levy up to $118,284,623 to help fund the $663,901,470 budget. 

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

A presentation previously shown to the council indicates $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. 

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The local tax rate is projected to increase by 0.16%, city officials say. 

A proposed 6% in electric rates and 9% hike in water rates is also included in the budget proposal. Those rate hikes are part of Rochester Public Utilities' possible 30% electricity rate increase over the next five years. 

The Rochester City Council will give its final vote on the budget during a meeting scheduled for December 1. There will be a public hearing.