Duluth’s legendary video streamer has returned to a familiar stage, standing before a television camera to explain that the city’s expenses are climbing, its revenues are not and taxpayers should prepare themselves for another miserable budget season.
Mayor Roger Reinert is working the naive local television media early. He would much rather define Duluth’s projected 2027 budget deficit in July than allow city councilors, department heads, union leaders and angry taxpayers to define it for him in September.
Reinert told WDIO that city revenue is expected to grow by about 1% next year while expenses climb 5.5%, producing a projected $5.5 million deficit. Approximately half of the general fund goes to police and fire, with another large share supporting streets and other public works. The city must establish its maximum preliminary property tax levy in September and adopt a final budget by the end of December. WDIO reported that Reinert remains committed to keeping property taxes affordable.
He should be. The average Duluth home increased in value from $185,000 in 2018 to approximately $295,000 in 2025, while its property tax bill grew from just over $2,000 to nearly $4,000, according to the mayor’s own December budget statement. Duluth property owners do not need another lecture about inflation. They live it every time they open a tax statement, utility bill or grocery receipt.
The mayor wants to sound the alarm before the budget fire reaches the roof. But a television interview is not a financial recovery plan. Duluth cannot video-stream its way out of a structural deficit. Eventually, Reinert must put down the microphone, open the ledger and identify exactly what city government will stop doing.
The 2026 general fund is $113.2 million. Salaries and wages account for $63.2 million, while employee benefits add another $30.6 million. That means nearly 83 cents of every general fund dollar is consumed by compensation before the city buys road salt, gasoline, library books, police equipment, software or practically anything else.
That is where the budget story begins. It is also where most elected officials would prefer the story not go.
Duluth does not have a $5.5 million mystery. It has a structural spending problem built largely into wages, benefits, overtime, staffing requirements and contractual obligations that grow faster than the revenues supporting them. Cutting fireworks, travel and coffee at City Hall might make taxpayers feel momentarily better, but it will not close this deficit.
The city’s largest bargaining unit received a 4.5% wage increase in 2025. In 2026, the increase was 6.5%, with eligible employees also receiving a 4% step increase. Another 6% increase follows in 2027. Other city bargaining units received similar, though somewhat smaller, increases. The city estimates its recently negotiated labor agreements will increase personnel costs by approximately $9.9 million over three years, according to the 2026 city budget.
There is your deficit, dressed in a collective bargaining agreement and scheduled to arrive on time.
That does not mean city employees are overpaid, unnecessary or unworthy of competitive compensation. Police officers, firefighters, snowplow drivers, inspectors, librarians and maintenance workers perform important jobs. It means Duluth agreed to compensation increases its recurring revenues cannot comfortably support. Once those agreements are signed, the money is no longer theoretical. It becomes a legal obligation.
The city’s salary and benefit costs are budgeted to increase by approximately $5.2 million from 2025 to 2026 — almost the entire projected 2027 deficit. Reinert can talk about inflation, gasoline prices and limited tax-base growth, and all are legitimate pressures. But the structural problem is sitting in plain sight. Duluth’s personnel costs are growing faster than Duluth itself.
Public safety must also be placed under the budget microscope. Police and fire together consume $55.3 million, or 49% of the general fund. Police account for $30.5 million and fire for $24.8 million. Those departments cannot be exempted from financial reform simply because elected officials fear being accused of weakening public safety.
The Fire Department exceeded its 2025 overtime budget by $1.3 million. Northern News Now reported that total fire overtime topped $1.6 million. The city responded by adding three firefighters and placing an $850,000 cap on 2026 overtime. That may prove to be a sensible investment if the additional employees actually reduce overtime, but taxpayers deserve monthly public reporting showing whether it is working.
Duluth should publish overtime by department, reason and month. It should identify how much is caused by vacancies, medical leave, military leave, vacations, minimum staffing requirements and special events. It should examine station deployment, shift scheduling, mutual-aid agreements, leave policies, emergency medical reimbursements and whether duties now handled by sworn police officers or firefighters could safely be performed by lower-cost civilian employees.
Those are not anti-police or anti-fire questions. They are the questions any responsible employer asks when two departments consume half of its operating budget.
The City Council complicated the message in June when it voted 7-2 to increase Police Chief Mike Ceynowa’s salary by about $19,000, to $207,489. The increase will not sink a $113 million budget, but it is the kind of tone-deaf decision taxpayers remember when politicians later tell them every dollar has been squeezed. WDIO reported that the chief’s pay has risen more than $46,000 since 2022.
Then there is administrative overhead. Legislative and executive operations, administrative services, finance, and planning and economic development together account for approximately $20.8 million. Those divisions include functions such as legal services, information technology, human resources, inspections and budgeting. But requiring each to produce credible 5% and 10% reduction scenarios would identify between $1 million and $2 million in potential savings.
The city reduced its general fund workforce by only 3.8 full-time-equivalent positions from the 2025 budget, falling from 624.65 to 620.85. Many reductions involved eliminating vacant positions instead of laying off existing employees. That was a start, but a government facing recurring multimillion-dollar deficits cannot pretend eliminating fewer than four net positions represents a historic restructuring.
Duluth also budgets $605,500 for contract services, $279,000 for other professional services, $234,200 for travel and training, $150,000 for lobbyists, and $101,800 for dues and subscriptions. Every one of those accounts should be reviewed. Combined, however, they total about $1.37 million. Eliminating every dollar would cover only about one-quarter of the projected deficit.
The tourism accounts provide more tempting political targets. The 2026 allocation includes $1.8 million for a tourism marketing firm, $695,000 in Visit Duluth discretionary funding, $663,000 for Visit Duluth event and convention sales, $510,000 for the Lake Superior Zoo, $400,000 for Spirit Mountain operations, $310,000 for the Great Lakes Aquarium and $280,000 for Downtown Duluth.
Those recipients should be required to produce measurable returns on the public investment. The zoo, in particular, should not receive an automatic $510,000 annual subsidy without a public accounting of attendance, tourism-tax generation, local economic impact, executive compensation, future capital needs and the cost of every realistic alternative — continued city support, regionalization, private operation, sale or closure.
Tourism taxes are restricted by state law, local ordinance, debt commitments and their legislatively authorized purposes. The city’s own tourism resolution says those dollars cannot be unilaterally redirected to unrelated municipal needs. More than half of projected collections are already tied to debt and previously mandated commitments. Tourism taxes also contribute $1.5 million to the general fund for police, fire, street, bridge and administrative services connected to visitors and special events.
Cutting the zoo subsidy and tourism marketing may be overdue. Neither action automatically deposits the savings into the unrestricted general fund. Reinert and the council would need to restructure the allocations within tourism purposes or seek legislative authority for greater flexibility.
Libraries and parks, meanwhile, should not become the convenient hostages of another budget crisis. Park maintenance accounts for $4.1 million of the general fund. The library system accounts for $6.2 million, including $346,000 for materials. Together, they cost substantially less than the Police Department alone. Duluth also carries approximately $113 million in deferred park maintenance. Cutting maintenance now merely creates a larger repair bill later.
The honest solution will require several actions at once: continued vacancy reductions, consolidation of administrative functions, aggressive overtime controls, regional public-safety partnerships, civilianization of appropriate police and fire duties, performance audits of outside contracts, return-on-investment requirements for tourism subsidies and a labor strategy that aligns future compensation increases with recurring revenue growth. One-time reserves should not be used to pay permanent salaries, and property taxes should be the last tool reached for, not the first.
Reinert says one percentage point on the city levy produces approximately $455,000. Covering a $5.5 million deficit entirely through property taxes would therefore require an increase of roughly 12 percentage points. That would be politically explosive and financially punishing for residents already squeezed by rising assessments, utility charges, insurance and everyday living costs.
The mayor must get underneath this problem. A video can tell Duluth that a deficit exists. Leadership requires telling Duluth which spending will stop, which services will change, which contracts will be challenged and which politically protected interests will finally be told no.
The red light is on, Mr. Mayor. This time, bring the budget knife.
