Dear Residents,

Each year, the City prepares a budget that outlines how we plan to operate and invest in our community for the year ahead. This process begins in May with several City Council work sessions, followed by the adoption of a preliminary budget in September. That preliminary budget is what determines the maximum levy amount reflected in the Truth in Taxation notices you received in November.

The Prior Lake City Council unanimously approved the City’s 2026 tax levy and general fund budget at their December 9 meeting. The approved $52 million budget includes a $21.3 million tax levy — a 7.46% increase from 2025 — and continues the city’s investment in public safety. 

Nearly half the levy increase is for public safety. A recent staffing and compensation study showed the need for an additional police sergeant, a police records specialist, an IT specialist to support police technical needs, and identified wage gaps for our officers when compared to similar sized metro cities. Ensuring the safety of our residents’—day and night—remains one of our highest priorities, and the 2026 budget reflects that commitment.

Another major focus of the 2026 budget is replacing aging infrastructure. Many neighborhoods built in the 1980s and 90s have reached the point where their streets and utilities must be reconstructed. Property owners who directly benefit from these projects pay a portion of the cost through special assessments; however, those assessment amounts have held flat for the past two decades. even as project costs have increased. The 2026 tax levy includes funding to supplement the street replacement costs for the Northwood Road Reconstruction .and other projects included in the city's Capital Improvement Plan.

Finally, this funding supports the everyday services our community relies on: police and fire protection, snowplowing, street repairs, park and trail maintenance, water and sewer operations, equipment and vehicles, and the wages and benefits for the employees who provide these services. 

How does this budget impact Prior Lake homeowners? A 7.46% levy increase does not mean property owners will see that percentage increase on their individual property tax bill. Rather, the estimated increase in the city portion of property taxes will be less than five percent for 80% of the city's property owners, or roughly $76 per year for a median valued home in 2026 ($433,600).

We understand the impact that taxes have on household budgets, especially in today’s economic climate. The City is committed to continuously evaluating how we operate to stretch tax dollars further while delivering high-quality services at the lowest cost possible. For a detailed summary of the 2026 budget, you can visit: priorlakemn.gov/budget2026.

As we close out the year, I want to express my gratitude for your partnership, engagement, and continued support in making our community a wonderful place to live. I wish you and your families a safe and joyful season and Happy New Year. 

-Jason Wedel, City Manager