St. Paul mayor asks departments to reduce budget by 4 percent
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St. Paul Mayor Kaohly Her proposed a 6.8 percent increase in the property tax levy — about $58 per year for the owner of a median-value home in the city — in her inaugural budget.
But Her also asked departments to reduce spending by 4 percent to avoid an even steeper tax increase. Her addressed City Council members and the community on Thursday morning at Allianz Field — a location she highlighted in her speech as an example of her administration’s efforts to welcome new businesses, expand the city’s tax base and identify new sources of revenue within city government.
“We’re already seeing the results of that approach, with nearly a billion dollars in investments in downtown,” Her said. “And right outside this very window we’re seeing a breath of fresh air and development up and down the University corridor.”
The cuts were expected as the city faces a $26 million budget gap, according to the city’s projections.
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In her Thursday address, Mayor Her proposed a $20,000 cut to her own compensation, and she said her office’s three highest-paid employees will forgo the 2027 cost-of-living increase.
“When savings are necessary, we should first examine management structures, reorganize where it makes sense, and reduce administrative costs before asking our lowest-paid employees to do more with less,” Her said.
Her said the city is eliminating positions where appropriate, and reassigning staff to refocus resources.
She said the cuts brought down the proposed property tax increase — which had started at more than 12 percent.
“I’ve always been honest with residents that we would not be able to reduce property taxes in the near term. What we can do is grow the tax base so that the cost of providing essential services is shared more broadly,” she said.
Spending on cybersecurity, climate resiliency
The proposed budget also includes areas where the mayor would like to spend more money.
Her’s budget includes investments in cybersecurity improvements identified through the after-action review of the 2025 cyberattack on the city.
She also wants to invest in modernizing the city’s payroll and benefits systems, and adding a workers' compensation analyst to reduce workers’ compensations costs down the line.
The budget also triples spending on climate resilience — including expanding the city’s tree canopy, developing electric-vehicle car-share options and improving energy efficiency in St. Paul homes.
The proposed budget would use gas and electric fee revenue to hire a climate director who would coordinate with the mayor’s office and city government staff.
Changing the subject
Her’s budget address was a way for the mayor to shift the conversation, after recent controversy. But in her budget address, she said her speech may have been boring to some.
“Good government should be boring. We are putting our head down, doing the work, and not getting distracted from the challenges and opportunities ahead of us. That’s how we can lower property taxes down the line and attract new neighbors and residents,” she said.
St. Paul’s clearing of encampments has drawn pushback from critics, and Her addressed that in her speech.
“I know that the past few weeks have been difficult not just for our communities but also city staff. People have strong opinions about the city’s decision regarding the Pig’s Eye encampment enclosure, and I understand that not everyone agrees with how we handled it,” Her said.
But she said conditions at the encampment couldn’t continue. She said they were unsafe for the people living there.
Her also made headlines recently not for her policies, but for an investigation into sexual harassment. St. Paul Police Chief Axel Henry filed a complaint against the mayor over text messages she sent to city employees.
Ward 1 City Council member Anika Bowie said she wants to let the process play out, but there is an elephant in the room.
“What makes a good leader is someone who can remain focused in the world as a woman of color who's in elected position. There is a lot of distractions that can be thrown at you,” Bowie said. “At the end of the day, people have voted for you to be focused.”
Mayor Her said she’s cooperating with the investigation.
Campaign promises
When then-state Rep. Her ran for the city’s top job against Mayor Melvin Carter in 2025, she promised to diversify the city’s economy.
“We need a St. Paul that is focused on expanding our revenue stream so that our budget isn't balanced on the backs of our residents’ property taxes and rents,” she told MPR News after her election to office.
City Council President Rebecca Noecker said she agrees with the idea of coming up with different revenue streams.
“We need to be creative, especially again at a time when we don't have help from the federal government, when our state government has consistently failed to deliver on their promise of local government aid,” Noecker said.
Her campaigned on revitalizing the downtown and Midway neighborhoods and on creating a more business-friendly city.
Noecker said she wants to make sure that next year’s budget preserves services that people depend on — the basics of city government that affect peoples’ everyday lives.
“The budget is the document that reflects our values as a community and that shows how we're planning to spend our dollars at a most basic level. What we're prioritizing, whether that's city services, whether that's staff, whether that's capital projects like streets,” Noecker said.
What do residents want to see in the budget?
Stephanie Veatch, of Dayton’s Bluff, was outside a Mississippi Market on East 7th Street after a shopping run. She said infrastructure should be in the budget.
“I hope that the budget continues to address some of the public infrastructure that we need improvements on here and continually need improvements on. We need better roads. We need better sewers,” Veatch said.
Robert McWhite, who lives in Cathedral Hill, said he has seen the waterways out west like the Colorado River.
“When I come back to Minnesota, I realize how lucky we are to have all these wetlands. So I would just suggest that we protect those wetlands. They're really our bread and butter here in Minnesota,” McWhite said.
Lauralie Millikan, who lives in the Mac-Groveland neighborhood, was riding her bike in the Starbucks lot in Highland Park.
“We need some more money for infrastructure, streets, parks. I think we need an adequate budget for crime prevention, for the police,” Millikan said.
Millikan doesn’t think Summit Avenue needs new bike lanes.
The St. Paul City Council will hold budget meetings at on Wednesdays at 10 a.m. beginning next week. The public is encouraged to attend.
