St. Paul Mayor Kaohly Her announced her inaugural proposed budget Thursday, which includes a 6.8% property tax increase to address a $26 million deficit.
Her, who took over as mayor in January after defeating incumbent Melvin Carter, gave her address at Allianz Field in front of dozens of city employees, business owners and residents. It was her first major public appearance since sexual harassment allegations against her became public late last month. Attendees applauded and stood on their feet as Her took the stage.
The mayor broke her 2027 budget into four main priorities: making it easier to do business in the city, creating a responsive government, enhancing safety and justice, and prioritizing fiscal responsibility.
“Fiscal reality tells us what we cannot do. Our values determine what we must do. This budget is built on both realities,” Her said in her address.
Her’s proposed budget includes three layoffs across city staff: one position in the Police Department, and two in Human Resources. It also decreases the number of sworn police officers the city has budgeted for from 616 to 605 by eliminating vacant supervisor positions. The department currently has 564 sworn officers.
St. Paul Police Federation President Mark Ross said in a statement that the department has been facing budget cuts for years, which is forcing officers to do more with less resources.
“The consequences of continuing on this path of cutting our budget are dangerous and potentially irreversible,” Ross wrote in part.
Property tax increase
Hamline University Professor David Schultz told Sahan Journal that the $26 million deficit will be difficult for Her to address. Taxes in St. Paul have increased in the past several years to address budget shortfalls, including a 5.3% property tax levy for 2026 and a 5.9% increase for 2025. The city’s 2026 budget was $883 million. Her’s proposed 2027 budget totals nearly $888 million in operating spending.
“She’s got to figure out a way of trying to minimize increasing taxes while at the same time trying to figure out how to lure businesses and residents back into the city,” Schultz said.
Her said that to address the deficit by property tax increases alone would amount to a property tax levy or more than 12%.
“I have always been honest with residents that we would not be able to reduce property taxes in the near term,” Her said. “For now, limiting the levy increase to 6.8 percent was the most responsible outcome we could achieve while protecting the services residents rely on.”
City Council President Rebecca Noecker told reporters after Her’s address that she’s concerned about the proposed levy increase, which would increase taxes for median home owners by about $58 annually.
“A lot of folks are going to pay more than that, and it often hits our lowest income property owners the hardest … I think those are the folks we need to be thinking about, and for them, $58 a year is a lot.”
Noecker said she hopes the council will be able to lower the 6.8% increase as it moves through the budget process.
Council Member HwaJeong Kim told Sahan Journal that the proposed increase is an “honest assessment,” given the costs of the services the city provides.
“My initial reaction is that she’s presenting something that is balanced in terms of responsibility,” Kim said.
In total, Her said her budget will reduce spending by $11.3 million. Her’s administration says the 2027 budget will have a net spending increase of $500,000 after the budget gap is closed.
Her is also voluntarily proposing taking a $20,000 pay cut, and her highest paid staff will forgo a 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,” she said.
Her says homelessness response needs to be a ‘shared responsibility’
In one of her first public appearances since the city’s clearing of the Pig’s Eye homeless encampment last week, Her acknowledged pushback over the decision. About 100 to 200 residents were living in the camp, many of whom moved to another encampment that the city says it will clear.
“I know that the past few weeks have been difficult, not just for our communities but also city staff,” Her said. “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’ve handled it.”
Her said the conditions at the camp had become unsafe for residents and the first responders, outreach workers and city staff, who Her said were coming to the site daily.
She said the city’s action “forced” government and service providers to address the issue and reality that homelessness cannot be solved by one local government.
While the city’s primary role is ensuring public safety, Her said the encampment closure made it clear that addressing unsheltered homeless needs to be a coordinated effort.
She said increasing affordable housing, shelter space and public housing largely falls to counties, the state and the federal government. She encouraged residents to contact their city representatives as they debate the budget if they feel the city should take on a larger role.
“It is a regional challenge, a statewide challenge, and ultimately a shared responsibility,” she said. “People are suffering. We cannot accept it, and we cannot solve it by asking cities to carry the burden alone.”
Her said she plans to advocate for more resources to target homelessness and housing at the Capitol during the next legislative session.
Kim said that while she disagrees that the city’s only role should be enforcement to address homelessness, she agrees that it has to be a regional approach.
“In lieu of government entities like the state and county, there are community members and organizations that are more than willing to help figure out how we fill gaps in the short term,” Kim said.
Next steps for the budget
The City Council will now begin debating the budget, and will set a maximum property tax levy in September. The levy could still be decreased after that point. The council will hold public hearings, and then vote on a final budget which will be sent to Her to sign.
By law, the final budget needs to be sent to state officials by the end of December.
Due to St. Paul switching its election cycle to even years, Her will only serve a three-year term.
Schultz said that means Her has much less time to get things done, which makes each budget she will release more crucial.
“She’s under a short leash in terms of accomplishing things,” he said.
