DATE: September 23, 2025
For Immediate Release
CONTACT: Stephanie Trottier
(763) 295-2711 | Stephanie.Trottier@MonticelloMN.gov
Monticello, MN – On Monday, September 22, the City Council approved the City of Monticello’s 2026 preliminary tax levy, the Economic Development Authority’s preliminary special benefit levy and budget, and set the Truth-in-Taxation public hearing in December.
Each year, the City of Monticello is required to certify a preliminary property tax levy to the Wright County Auditor/Treasurer by September 30. The preliminary levy is a first step in a longer process of approving the final levy. This preliminary levy is used to prepare the Truth-in-Taxation notices that property owners receive in November. The final levy, adopted in December, can be lower than the preliminary amount but cannot be higher.
At the September 22 meeting, staff presented the levy recommendations developed through five budget workshops held by Council from July to September. Through this process, the City strives to minimize the impact on taxpayers without reducing service levels or impacting future planning. The preliminary levy is expected to fund the draft budget and allow the City to plan for the future.
The preliminary levy is based on estimated tax capacity within Monticello, using known changes to the taxable market value for each of these tax classes: residential, apartment, commercial and industrial, and Xcel Public Utility properties. After multiplying the market value changes by the average rate of each tax class, the City’s tax capacity is estimated to increase $3,236,000, or about 8.64% from 2025.
Based on these estimated changes in taxable market values across Monticello, the City is proposing a total 2026 preliminary levy of $15,337,000. This represents an increase of $1,220,000, or an 8.64% increase from the city tax levy in 2025. By increasing the levy the same percentage as the estimated change in tax base, the city’s tax rate will remain close to 2025.
Most of the tax levy goes into the City’s General Fund. This fund supports many of the basic functions of local government, including public safety, snow and ice removal, planning and zoning, and more. While evaluating the budget for next year, the City Council considered employe compensation, cost of contracted services like police protection, repairs and maintenance of city infrastructure, and conservation of natural resources.
The preliminary levy also included an allocation for the Capital Fund that is used to finance larger projects. In 2026, this is planned to include the completion of the Golf Course Road Trail improvements, repairs to the Monticello Community Center facility, roof replacements at various city-owned buildings, and additional parking in the downtown.
As allowed by state statute, funding for Minnesota cities is reliant on property taxes. However, Monticello frequently seeks other funding sources, including state and federal grants, to limit greater impacts on local taxpayers.
The decision by the City council on Monday night included the part of local property taxes they can control: the size of the City’s levy. There are other factors that influence changes in a property tax bill, including any changes to the property value.
Because the preliminary levy is proposed at the estimated increase in tax base, the tax rate is projected to stay the same as 2025, and properties will generally see a city tax increase equal to the percentage change in value of their property. The increase does not include the county, school or Economic Development Authority taxes.
Unlike most other municipalities, the presence of the nuclear generating plant significantly impacts Monticello’s tax base. The facility’s value is determined by the State of Minnesota each year. The taxable market value of the Xcel Nuclear Energy Plant will increase $70,000,000 (10.2%). This increase in the market value translates to 3.75% (more than one third) of the preliminary levy increase. This shifts more of the local tax responsibility to Xcel from other property taxpayers.
In addition to the City levy, the Economic Development Authority’s Housing and Redevelopment Authority (HRA) special benefit levy of $504,000 and preliminary 2026 budget were also considered. The 2026 special benefit levy reflects an increase of $5,000 (or 1%) over the levy of 2025. This is the maximum amount allowed by state statute. The final adoption of the HRA levy and budget will occur at the same time as the City’s levy.
Following Truth-in-Taxation notices, residents will have an opportunity to speak about the proposed tax levy and voice their opinions to City Council at the Truth-in-Taxation Public Hearing on Monday, December 8, 2025, during the regular Council meeting at 6:30 p.m. following the public hearing, the City Council will adopt the final 2026 property tax levy and 2026 budget.
To learn more about the City of Monticello’s budget process, how the levy is determined, and what property taxes are used for, visit the City of Monticello website.