Every year, the City Council approves a budget that covers three main areas:

• Daily operations and services
• Big purchases like roads, vehicles, and equipment
• Paying down debt

This money keeps the city running and ensures that residents, businesses, and visitors receive good services at a fair price. For 2026, the proposed General Fund budget is $26.4 million, which is $2.2 million more than in 2025.

The budget process starts in April. City staff review all departments to determine the actual costs of services. This year, departments were told to plan for the same amount as in 2025. They could only ask for more money if:

• It was unavoidable to keep current services running
• The City Council specifically requested it
• It's part of the city's strategic plan 

Any requests to add new services or expand existing ones had to be truly necessary to be included.

Did you know? Over 70% of the city’s general fund budget is allocated to personnel costs.

Key Drivers of the Preliminary 2026 General Fund Budget:

• Wage increases: Salaries and benefits make up more than two thirds of the city’s spending. Wage increases, which include a 3% cost-of-living adjustment, will add about $1,045,000 to the budget.
• Minnesota Paid Leave Act: Starting in 2026, a new state law requires employers and employees to pay into a paid leave program. The tax is 0.88%, and the city must pay half of that. This will cost the city an estimated $70,000.
• Elections: 2026 is an election year, so we need extra staff at polling places. This will cost about $49,000. State Fire Aid: Good news here. The Savage Fire Relief
  Association’s benefit plan ended in May 2025. Now the city can use State Fire Aid money to help pay firefighter salaries and benefits. This will save the city about $250,000.
• Health Insurance Costs: Last year, the city shopped around for health insurance and saved 16.8%. But for 2026, rates are going up by 12% (which was capped in our contract). This will cost $225,000.
• Priority Level 1 Increases: These are essential costs we can’t avoid, like software licenses, gas, and electricity. The total is $447,747 ($158,400 is one-time costs, $289,347 will be recurring expenses).
• Dedicated Equipment Levy (Year 2 of 5): The city is adding $100,000 to reduce how often we borrow money to buy equipment like trucks and machinery. Our financial advisor, Baker Tilly, recommended this approach to build a more stable replacement plan.
• Fire Station Remodel Loan Payment: We’re paying back a loan for the Fire Station #1 remodel using state Public Safety Aid money and an internal loan from the Water/Sewer Fund. This annual payment is $75,000.
• Police video system (Year 2 of 4): We replaced the police department’s video system in 2024. We’re gradually shifting the cost from the state Public Safety Aid to the General Fund. This year’s increase is $55,000.
• Staff Requests: The city is proposing to add three new positions. Salaries and benefits for these positions will cost about $224,500.

Did you know? Approximately 50% of the City's budget supports local public safety services.

The impact on homeowners depends on how much your property’s value has changed since 2025. Scott County estimates an average increase of 2.3%.

2025 Median House value:

• $408,200
• City Tax = $ 1,657

2026 Median House value:

• $417,700
• Proposed City Tax = $ 1,778

Change of:

• $121 per year
• $10 per month

Did you know? Only 1/3 of your property tax bill goes to the City of Savage.

When you get your property tax bill, keep in mind that your bill includes taxes from several jurisdictions, not just the City. Roughly 1/3 of the typical Savage residential tax bill goes to the City of Savage. The remaining taxes go to your school district, Scott County, and other special taxing districts such as watersheds, transit, mosquito control, etc.

Did you know? You can estimate your property taxes at www.scottcountymn.gov/422/Property-Tax-Calculator.

What Happens Next

City staff will continue to work on the budget and tax levy to keep taxes as low as possible while still providing quality services. Residents are invited to attend these City Council meetings:

• December 1 at 7 p.m. — Truth-In-Taxation Public Hearing in the Council Chambers. This is your chance to share your thoughts and ask questions.
• December 15 at 7 p.m. — The City Council will vote on the final 2026 budget and tax levy.

Questions?

• About the budget or tax levy: Contact Savage Finance Director Matt Burt at mburt@savagemn.gov or 952-882-2691.
• About your property's market value: Contact Scott County at 952-496-8115 or visit www.scottcountymn.gov/383/Pay-Property-Tax.