Howie's daily column is sponsored by Lyric Kitchen . Bar.
The City of Duluth does not need another property tax increase in 2027. It needs a nerve transplant.
That sounds harsh, but the math already is. In its 2026 budget, the city said it entered that cycle staring at a projected 17% levy increase in 2026, followed by another 10.5% increase in 2027 if nothing changed. The same budget document said the state held Local Government Aid flat, even as city costs kept climbing.
That is the part of this debate local taxpayers ought to stop dancing around.
Duluth does not have a one-year problem. It has a structural problem. The city is trying to maintain an old, spread-out, infrastructure-heavy regional center with a revenue base that does not grow fast enough to keep up. The 2026 budget says police and fire alone make up 49% of General Fund spending. Public Works adds another 11%. That means most of the budget is already locked into core services before the city even starts talking about everything else residents want from local government.
So no, balancing 2027 without a tax increase does not mean pretending there is some painless, magic pencil-sharpening exercise waiting in City Hall. It means admitting three things at once.
First, Duluth should stop using homeowners as the automatic release valve every time the cost structure goes sideways. The city just lived through a budget cycle in which its own documents framed affordability and sustainability as central goals. If that language means anything, it has to mean saying no to another trip back to the same taxpayer well.
Second, the city should squeeze harder on the side of government that residents do not directly experience as street plowing, fire response, police patrol, parks upkeep or basic public works. A real zero-based review of administration, layering, outside contracts, non-core programming, vacancy management and service overlap should come before any serious talk of another levy hike. That will not close every gap, but it is the first place elected officials should be willing to sweat.
Third, Duluth has to speed up the work that broadens the tax base instead of merely milking the existing one. The city’s own fiscal presentation has made the point repeatedly: if commercial and residential growth do not expand, the burden lands harder on the people already here. That means downtown housing conversions, infill development, more workforce housing and a faster path for projects that put new value on the tax rolls. The 2026 budget and the mayor’s public fiscal presentation both point to that same reality.
There is another point worth making, because this is where the politics usually gets slippery.
Local Government Aid is not the villain here. Duluth’s aid from the state has gone up over time, not down. The big jump came in 2024, when the city’s LGA moved from about $30.8 million to about $35.2 million. By the city’s own 2026 budget, LGA then stayed essentially flat into 2025 and 2026. In other words, the state did help more. It just did not solve the city’s larger cost problem.
That matters, because it strips away one easy excuse.
If Duluth wants to balance 2027 without a property tax increase, the city should build that budget around four blunt priorities: protect core public safety and street-level services, cut or consolidate non-core spending, hold the line on administrative growth, and accelerate development that creates new taxable value. Add disciplined fee reviews where actual users can fairly bear more of the cost, but do not kid the public that fees alone will save the day. The city’s own fiscal materials show how concentrated the real money is.
This is not a cheerful message. Duluth is an older city with older obligations, and old cities rarely get to budget their way out of trouble with charm.
But there is still a clean argument for 2027: no property tax increase, no pretending, no fluff. Balance it by choosing what matters most, cutting what does not, and finally acting like growth is a budget strategy rather than a slogan.
Here are the year-by-year Local Government Aid numbers for the City of Duluth, using Minnesota Department of Revenue certified city aid amounts.
2016: $29,264,120
2017: $29,299,670
2018: $29,645,975
2019: $29,670,788 (city budget rounds this to $29.67 million)
2020: $30,282,160
2021: $30,543,564
2022: $30,671,679, including the supplemental 2022 city aid distribution
2023: $30,807,820
2024: $35,175,072
2025: $35,231,196
2026: $35,332,327
Bottom line: Duluth’s LGA has increased overall, not decreased. From 2016 to 2026, it rose by about $6.07 million, or roughly 20.7%. The sharpest jump was from 2023 to 2024.
