The preliminary budget approved by the Minot City Council July 21 calls for a 2026 tax levy of $29.5 million, up from $24 million in 2025. It amounts to an increase of $83.25 per $100,000 of residential property value.

“It seems on the surface it’s a really simple process,” David Lakefield, finance director for the city, said of calculating the 3%. In reality, he said, “There’s a lot of moving pieces, and I think as they’re starting to implement this and work through this, there’s a lot of cities that are all of a sudden coming up with little one-off scenarios that nobody anticipated when they were coming up with the language. But it’s our intent to fully comply with the law. We are not going to come with a budget that exceeds the 3% cap.”

City Council member Mike Blessum, who questioned the legality of the increase at the council meeting, said budget cuts will be proposed to bring the tax levy in line with what taxpayers have been expecting with a 3% cap. That amount, according to information provided by the city manager, would be closer to a $790,000 increase over the 2025 tax rather than the $5.5 million increase in the preliminary budget.

“Regardless of whether it’s legal by the letter of the law, it certainly doesn’t meet the spirit of the law,” Blessum said July 25 after reviewing how the levy increase was calculated.

Mike Blessum

“It will be my intent through the rest of the budget process to get us back underneath what I believe the intent of the law is, which is 3% on last year’s number,” he said, referring to 2025, “and preferably, once we get within range, to then again use reserves to bring us back to either the same number as last year or slightly less. … We’ll see where the other council members want to go, but I think we owe it to the legislative body that did the hard work to get money back in the people’s pockets. We have to do our part now, which was their intent.”

Driving the increase in the preliminary budget is the new law’s provision allowing a political subdivision to pick the highest levy of the previous three years as its base on which the 3% is calculated. Rather than using the $24 million levied in 2025, Minot’s preliminary budget uses the $28.5 million levied in 2024.

The law also allows for a levy to cover the amount of debt increase occurring from one year’s budget to the next. Lakefield said the accounting method the city has been using for flood control debt would allow for uncontrolled growth in Minot’s levy into the future because flood control debt is projected to continually rise. That could occur despite the fact Minot uses sales tax rather than property tax to pay the bonds.

“So we are changing our process to correct that. We’re closing the loophole, so to speak. Self policing it because we don’t think that’s within the intent of the law,” he said.

However, during the transition, the new way to account for flood control debt further impacts the calculation of the 3% cap. By using the 2024 base year and the proposed debt calculation, the city can collect $29.5 million and remain within the cap in 2026. While he believes the calculations are defensible, Lakefield added the council can choose to make changes to lower the final tax levy.

Blessum said he is confident the preliminary tax levy can be reduced because of the budgeting efforts already done by city staff.

“Our staff did a fabulous job of putting us within shouting distance of getting back to where we should be, so we just have to follow through on the hard work they’ve already done,” he said.

The next step for the council is to receive the budget message of the council president on Aug. 18. Acting Mayor Mark Jantzer, the council’s elected president, and Vice President Lisa Olson are jointly working on a message. First reading and a public hearing on the budget ordinance will occur Sept. 15, with final adoption anticipated on Oct. 6.