Chanhassen expects expenses of $55.7 million for 2026 — a decrease of $5.4 million (or -8.8%) compared to the city’s 2025 overall expenditures.
Yet, the city’s property tax levy is set to increase 6.9% after the City Council approved its new budget at a Dec. 15 meeting. A Truth-in-Taxation (TNT) meeting, which included a public hearing, was held prior to the budget’s adoption.
“The proposed budget reflects the city’s commitment to being a responsible steward of public resources while continuing to deliver high-quality services residents rely on every day,” reads an update on the city’s website. “It prioritizes public safety, infrastructure maintenance, parks and trails, and utility systems while maintaining healthy fund balances and strong financial stability.”
The decrease in overall expenditures in 2026 is largely due to lower budgets for street reconstruction projects, according to a memo from Chanhassen Finance Director Kelly Grinnell.
The Pavement Management Plan (PMP) Fund, however, still accounts for 21.6% of the city’s entire budget for 2026, according to the memo, with major street spending this year to go toward the Market Boulevard and Great Plains/Lake Drive East projects.
Chanhassen City Council approved the city’s final 2026 budget, 2026-2030 Capital Improvement Plan, and 2026 property tax levy at a public TNT meeting on Dec. 15.
TNT meetings are required by the state of Minnesota for cities with a population more than 500 to bring transparency to the development and adoption of budgets and levies. The meetings are meant to give residents a clear look at the proposed budget and levy and to enable public input before final approval.
Grinnell presented the proposed budget and levy at the city’s TNT meeting. The presentation provided residents with an overview of the proposed budget and Capital Improvement Plan, highlighted notable changes in various city funds, and explained impacts on residents’ property taxes and utility bills in the upcoming year.
Chanhassen has made the slideshow available on its website.
Public safety accounts for the largest portion of the city’s 2026 General Fund expenditures at 36%, according to the presentation. General government is next at 22%, and public works is third at 19%.
Eleven residents attended the TNT meeting and one resident spoke at the public hearing. Chanhassen resident Chris Mozina expressed concern that the tax levy increase seems high when taking into account the city’s growth in the number of taxable properties and businesses over the past year, which would presumably spread the tax burden across more payers.
“Based on [the city’s] growth,” said Mozina, “I’m just trying to understand, as you put that budget together, what is the total number of taxable properties and businesses? And hasn’t that increased pretty substantially this past year?”
Grinnell responded to Mozina’s question after the public hearing closed, clarifying that while the city has recently added new businesses, other factors diminish that growth’s impact on the city’s tax capacity.
“We do have a number of businesses that are coming in, so that does help,” Grinnell said. “However, with some of the new businesses, the state has a fiscal disparities program where we have to kind of share the increase in value from commercial-industrial properties added. So, if we add a lot in new business, we don’t see that full amount on our tax capacity. It does help, but we don’t see the full benefit of that.”
After closing the public hearing, the City Council adopted the 2026 budget, 2026-2030 Capital Improvement Plan, and 2026 levy as proposed.
Chanhassen’s 2026 property tax levy comes to $16.4M, an increase of $1.1M (or 6.9%) over the city’s 2025 property tax levy. According to Grinnell’s presentation, the median home in Chanhassen, valued at $501,600, will see a property tax increase of $75 (assuming a 4.53% increase in market value over 2025).
The property tax levy accounts for 31.1% of the city’s overall revenues for 2026, according to the memo from Grinnell.
“The largest change [in overall revenues],” the memo says, “is due to the start of a local option sales tax in the 2025A Temp Sales Tax Bonds debt service fund, with total revenue projections in 2026 of just over $3 million. The sales tax will be used to pay debt service on the new community center.”
A preliminary levy increase of 7.2% was previously adopted at a City Council work session on Sept. 8, at which time the council expressed intent to reduce the proposed levy before the TNT meeting.
“Staff noted that favorable bond results allowed the projected levy increase to fall from 7.2 percent to 6.9 percent,” says a post on the city’s website, “but the Council ultimately voted to set the preliminary levy at 7.2 percent, expressing the intent to bring it below 7 percent by December when the final levy is adopted.”
City Council lowered the proposed levy to 6.9% at a work session on Nov. 24, removing a $35,000 contingency that was previously suggested to be allocated to the park renovation fund, according to another post on the city’s website.
Chanhassen’s 2026 preliminary tax levy increase of 6.9% is below the 8.7% statewide average increase for cities, reported by the Minnesota Department of Revenue.
