Mayor Roger Reinert will roll out his 2026 budget proposal on Thursday, a plan built around the promise that property taxes will rise only at the cost-of-living level.
The same promise helped carry him into office, and now it will be tested against the city’s swelling expenses and growing financial pressures.
Duluth’s fiscal picture has shifted quickly in recent years. In 2023, the city operated with about $422 million in revenue against $367 million in expenses, with the General Fund set at $123 million.
A year later, revenues climbed to $444 million while expenses hit $450 million, and the General Fund dipped to $120 million as officials leaned on one-time dollars and a transfer from retiree health accounts to close the books.
The current 2025 budget swelled to a record $474 million in spending even as the General Fund slid to $109 million, with the property-tax levy climbing to $43.4 million — a 13 percent jump from just three years earlier. On paper, Duluth has never spent more.
In practice, the money available for basic services such as police, fire, plowing and parks has narrowed.
A windfall of state aid helped soften the edges. Local Government Aid jumped by $4.4 million in 2024, the largest increase in more than two decades and the equivalent of a double-digit property-tax hike.
The city collected $35.2 million in aid in 2025, nearly one-third of its General Fund. The infusion covered shortfalls but also tied Duluth more tightly to the state, leaving its budget exposed to any future cuts in St. Paul.
The longer trend tells its own story. When Emily Larson took office in 2016, the General Fund was $89 million. By the time she left in 2023, it had climbed to $123 million, nearly a 40 percent increase in eight years.
Reinert’s first budget marked a reset, pulling the fund back to $109 million after what he described as inflated 2024 totals. Even with that correction, the General Fund today is still about $20 million higher than when Larson began her tenure.
The levy represents roughly one-third of a Duluth tax bill, with St. Louis County and Duluth Public Schools accounting for most of the rest. City leaders frame cost-of-living adjustments as restraint, but for residents the bottom line is clear: since 2022 the levy has gone up every year, and more of it has been consumed by debt service and capital projects rather than day-to-day operations.
Debt payments now approach $31 million annually, eating into dollars before a single street is plowed. Deferred maintenance on streets, buildings and equipment totals hundreds of millions, an unpaid tab that grows with each year.
Tourism, once a reliable growth engine, has also shown signs of strain. Even after one of the busiest summers of events on record, collections slipped. That leaves property owners carrying a greater share of the burden, even as they hear pledges of fiscal restraint.
Reinert’s presentation will mark the first real look at how his administration intends to balance campaign rhetoric with fiscal reality.
For Duluth households already sending a third of their property-tax bill to City Hall, the question is whether the 2026 budget delivers stability or simply another round of accounting maneuvers dressed up as discipline.
