Crosby's budget, in plain English

If you own property in Crosby, you help pay for the city — the plowing, the police and fire calls, the library, the parks. You deserve to understand how that money works without having to read a hundred-page council packet or decode a state auditor's spreadsheet.

That's all this page is: the City of Crosby's finances, explained the way you'd explain them across a kitchen table. Nothing here is a leak or an opinion piece. Every number comes from a public record — the Office of the State Auditor, the Minnesota Department of Revenue, Crow Wing County, and the city's own posted packets and minutes — and every claim is linked so you can check it yourself.

One thing this page is not: a complaint about the people at city hall. Crosby's staff and council are working hard with too few hands on a genuinely difficult problem. The numbers below describe the problem. They don't assign blame for it.

The city's day-to-day operations run out of one main account called the general fund — think of it as the city's household checkbook. (Water and sewer bills go into separate utility funds that, by design, pay for the pipes and plants, not for general operations.)

For 2026, the general fund plans on about $3.13 million coming in. Nearly all of it arrives from just two places:

• The property tax levy — about 47 cents of every dollar. The levy is simply the total amount of property tax the city decides to collect from all Crosby property owners combined for the year. It is one number, set by the council each December, and then divided among every taxable property in town according to value.
• State aid — about 42 cents of every dollar. The biggest piece is Local Government Aid, or LGA: money the State of Minnesota sends to cities whose service needs outrun their local tax base, so that a town of 2,400 can still afford police, fire, and streets. It's not a grant Crosby applies for; it's a formula in state law. Crosby's 2026 LGA is $958,845 — about $403 for every resident, among the highest per-person amounts in the area.

Those two sources together are roughly 89% of general fund revenue. Fees and charges make up most of the small remainder.

Here's the squeeze: the Legislature boosted the LGA formula in 2023, but since then the statewide amounts have been essentially flat — Crosby's aid grew just 0.1% per year from 2024 to 2026 — while the city's costs, most of them wages set by contract, keep rising. When one of your two legs stops growing, the other one has to carry more. That other leg is the levy. Which brings us to the story most residents already feel in their tax statements.

Here is the city levy for the last four years, from the Department of Revenue's certified levy tables:

That's a 27.3% climb in three years. In plain terms: the total pot of property tax the city collects from all of us grew by more than a quarter. Your individual bill depends on how your property's value moved compared with everyone else's, so no two statements change identically — but when the pot grows 8–9% a year, the typical bill follows. The council itself has acknowledged the strain: the city's September 2025 budget workshop minutes record that "approving needed levy amounts is beyond what residents can absorb."

The part almost everyone gets backwards

You may have heard that Crosby has "one of the lowest tax bases in the state." The public data says that's an overstatement — and the truth is actually more important. A city's tax base (technically its "tax capacity," a measure built from property values) is what the levy gets spread across. On the State Auditor's 2023 city data, Crosby's tax capacity per resident was $777 — below the statewide median of $816, but ranked 386th of 851 cities. That's roughly the middle of the pack, not the bottom.

What is extreme is the tax rate — how hard that ordinary-sized base is being squeezed. The rate is essentially the levy divided by the base: same levy, smaller base, higher rate. On Crow Wing County's final 2026 rate sheet, Crosby's city rate is 69.0% of tax capacity — second-highest of any city in the county, behind only Ironton:

Why does this distinction matter? Because it changes what "help" looks like. A city with a truly tiny base has almost no options. A city with a middling base and a very high rate has a different problem: the current taxpayers are already carrying about as much as they can. One reason the load is heavy: per the September 2025 workshop minutes, about $84.5 million of property in Crosby — roughly 26% of all property value in town — is tax-exempt (government buildings, churches, and other nonprofit property pay no city property tax), so the levy falls on the remaining 74%.

The budget the council adopted for 2026 plans to spend more than it takes in: $3,179,201 out against $3,133,725 in, per the city's filing with the State Auditor — a built-in gap of $45,476.

Forty-five thousand dollars may not sound dramatic against a three-million-dollar budget. The reason it matters is what stands behind it. A household can run a small deficit comfortably if it has savings; Crosby's cushion is thin. In 2020 and 2021, the State Auditor's records show the city's overall cash balance actually ended the year negative — the checkbook was overdrawn at year-end. That was righted by 2022, and it's history, not the present. But it tells you how little margin this budget operates with: a deficit isn't being absorbed by deep reserves, because there aren't any.

Two more facts round out the picture. First, most of the budget is people: the September 2025 workshop minutes put 2026 payroll at about $2.4 million — roughly three-quarters of the general fund — with wage increases set by negotiated contracts. Public safety alone is just over half of all general-fund spending. There is no line item labeled "waste" to cross out; the budget is mostly the paychecks of the people who plow the streets and answer the 911 calls.

Second, the bookkeeping itself has been running behind. The State Auditor's 2025 budget survey lists Crosby as "Failed to Report" — the city's figures simply aren't in it — following a stretch of staff turnover in 2024–25 that put the books behind. Catching up has cost real money: the council recently weighed $30,000–$34,500 for outside help just to close out the year's books so the annual audit can be finished. That's not scandal; it's what happens when a small staff has more required work than hours.

Every fall, Minnesota cities set next year's property taxes in two steps — and the first step is the one that matters most.

By September 30, the council must certify a preliminary levy for 2027 — a first official number for how much property tax the city will collect next year. ("Certify" just means formally reporting it to the county, which administers property taxes.) Here's the key mechanic: the preliminary levy is a ceiling. Between September and the final vote in December, the council can lower it — but it cannot raise it. Whatever number is certified this September is the worst case for your 2027 taxes, and the only direction left is down.

Crosby's council meets on the second and fourth Mondays, which this September means the 14th and the 28th. Based on the calendar and the city's posted agendas, the preliminary-levy vote is expected at the September 28 meeting, two days before the state deadline. As of the city's August packets, no proposed 2027 levy figure has been published yet.

About that December meeting: it's the one required moment each year when residents can stand up and be heard on the levy before it's final. Last December's drew zero attendees. That's not a scolding — December Mondays are busy and budget hearings aren't anyone's idea of a night out. It's an invitation. A council deciding between levy options hears from nobody most years; even a handful of neighbors showing up, asking questions, and saying what an 8% year does to their household would be genuinely new information in that room.

If the base is ordinary, the rate is near the county's ceiling, state aid is flat, and the budget is mostly contractual paychecks — what's left? Two things, mostly.

Money that isn't Crosby's. A long list of state, federal, and foundation programs exists specifically to fund projects in small cities like this one — parks, water systems, fire equipment, historic sites — and every outside dollar won is a dollar the levy doesn't have to carry. The full inventory, with deadlines and dollar ranges, lives on this site at Money on the Table.

Better information at decision time. Councils choose better when someone has done the homework: what each levy option means in real dollars on a real house, how Crosby compares with cities its size, which grant window closes next month. That takes hours the city's small staff doesn't have — which is a gap a resident can help fill. One resident's offer on that front is here.