City council struggles to hold line on taxes in 2026
Sales tax, merit pay discussed at budget meeting
Redirecting some proceeds from Minot’s existing city sales taxes to public safety is an idea Minot City Council members could be hearing more about.
The council met Friday to provide input into 2026 spending following three days of budget talks with department staff. Discussion touched on a public safety sales tax and spending priorities as the city attempts to figure out where $1.7 million in budget adjustments will come from to comply with a new state law capping property tax increases at 3%.
City Manager Harold Stewart said he didn’t plan to include a public safety sales tax in the 2026 draft budget he will present to the council on July 21, but it could be discussed in future budget cycles. He acknowledged the council’s priority on public safety and its interest in using some reserves to balance the budget.
“I can tell you right now that without capturing the full 3% (tax increase), we’re going to have over another million dollars in cuts to make, and so I anticipate likely that my recommended budget will probably be based off of including the full 3% that the state has allocated. Or the other alternative on that is that we’ll have to either dip into reserves deeper – I was already planning on dipping into reserves to some extent – or we’re going to have to probably decrease funding on the street maintenance side and slow down our progress on that. But my goal is to try and keep that consistent with our 2025 budget and was hoping to add a little bit more in there.”
“We have a $1.7 million issue that we know we have to resolve somehow, whether that’s further budget cuts or use of reserves or a combination thereof,” Finance Director David Lakefield told the council. “But we know we are sitting at a dollar amount that we can’t attain at this point. So, that’s part of the challenge we will have in the next few weeks
“We have to consider and possibly reconsider the amount of money that is allocated to outside agencies,” council member Lisa Olson said. “Each request that we receive is an important part of a successful community, and oftentimes we see the dividends. But as we consider core and noncore activities, these requests should be considered noncore. If there is a way to fund the request without an undue hardship to our taxpayers, I would support the allocations as requested.”
She also supported looking more closely at a public safety sales tax.
Council member Mike Blessum said he cannot support another sales tax.
“Until we get the spending problem under control, I’m not a fan of a new tax,” he said
Council member Scott Samuelson proposed taking the first penny with property tax relief, economic development and capital improvements and redirecting it toward public safety.
“We just need to reallocate that to where it should be going – where our priority should be,” he said. “I just think we have to start looking at our priorities as budgets get tougher.”
“I’m not a fan of sales tax,” council member Paul Pitner said. “I think it adversely affects lower income individuals, but it is something that has to be considered.”
However, he added he will be an advocate for keeping the sales tax portion for economic development if a discussion on reallocation is held.
“I just don’t want to see us undercapitalize our efforts because I think we put ourselves in a bind and we start to move backwards,” he said.
Minot’s has two 1% sales taxes that together fund flood control, property tax relief, the Northwest Area Water Supply, economic development, infrastructure and capital improvements. Annual collections are estimated at about $13 million per each sales tax this year. So far, collections through May were down every month except March and ran about $149,000 below last year.
Council members also indicated a desire to retain staff and provide adequate compensation in 2026.
Blessum advocated for merit-based pay, saying the city cannot afford a proposed 5% pay increase, plus benefit increases. He suggested a 3% increase for employees, with 5% increases for those employees identified by performance as indispensable.
“I do not support a merit-based salary increase system. This may work in the private sector, but it does not work in the public sector,” Olson said. “I heard from numerous residents that said this is the very best way to kill morale, resulting in a loss of employees.”
“When it comes to a merit-based pay system, I’m hot and cold on it,” Pitner said. “I don’t know if that’s the right way or not. I need to see more. I’ve heard concerns and I’ve heard benefits.”
Overall, council members said they have been pleased with this year’s budget process and the work the staff put into their spending proposals. Acting mayor Mark Jantzer, a council member since 2008, said this year’s budget process has been the best he’s seen.
Taxpayers now need to weigh in, Olson added.
“Now is the opportunity for people to get in contact with us. Let us know what your priorities are,” she said.