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 the total amount of property tax the city collects from all Crosby property owners combined for the year, set by the council each December and then divided among every taxable property in town according to value. One thing to know up front: the total the county sees is really a stack of levies added together — one for day-to-day operations, plus separate, smaller ones for the library, the Hallett Community Center, and capital improvements. Only the operations piece lands in the general fund. The whole stack is laid out below.
• 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.

A note on scope. This section — and the "$3.1 million budget" people quote — is the general fund only: the account that pays for police, fire, streets, parks, and administration. The library and the Hallett Community Center run on their own funds with their own budgets (about $226,000 and $760,000 for 2026); water, sewer, and storm drainage are utility funds paid by user bills; and capital projects have a fund of their own. The city's money moves through a dozen funds, and the general fund is one of them. When the levy or the deficit comes up below, keep in mind which fund is being talked about.

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."

What's actually inside the levy

"The levy went up 27%" is true. It's also the least useful way to say it, because the levy isn't one number — it's a stack. The council certifies a single total to the county, but that total is several separate levies added together, each for a different purpose and each with its own story. Here is the 2026 stack, from the December 8, 2025 council minutes that adopted it:

Why the split matters: when the total goes up, it isn't always the day-to-day city getting more expensive. The council's own September 2025 budget workshop minutes tell each layer's story plainly:

• The library levy has grown sixfold in a decade — from $20,000 ten years ago to $120,000 in 2025, and from 1.5% of the total levy to 7.4%. The reason isn't a bigger library; the minutes say its budget "has remained constant" over those ten years. What changed is that the Hallett Trust, which once covered essentially all of the library's operating costs, now provides about $60,000 a year, and a cash reserve that had been built up to hold the levy down was, in the minutes' words, "spent without alternative funding options." The levy stepped in: $20,000, then $60,000, then $100,000, now $120,000.
• The capital levy has swung with the pressure on everything else. The council raised it from $125,000 to $250,000, cut it back to $125,000 in 2025 "due to other pressures on the levy," and set it at $220,000 for 2026 — while acknowledging that "even at $250,000 a year, the needs of the city for capital investments into equipment, streets, and facilities far exceed $250,000." This is the line that has to cover Crosby's own share of a street project, a plow, or a roof when a grant doesn't. The fire-truck and equipment debate that ran through last winter's meetings was, at bottom, a debate about how thin this line is (December 2025 minutes).
• The Hallett Community Center levy hasn't moved in ten years — $20,000 flat — but the minutes note the city has averaged another $20,000 a year on top of it to cover the center's operating deficits, repairs, and equipment.
• The operations levy's story is wages. Most of the general fund is payroll, and the 2026 budget carried $155,872 in "contractually negotiated wage increases," taking projected payroll from $2,244,155 to $2,400,027. The proposed general-fund budget itself rose 3.17%.

So the 27% headline is really four smaller stories stacked on top of each other: wages catching up, a capital line that has been too small for years, and two community institutions needing more levy support as their other funding thinned. None of them is the same thing as "the city is spending more on everything," and each one points to a different fix.

Expect the 2027 stack to gain a layer. The 2026 equipment certificates the council approved early this year — for the fire truck and public works equipment — come with their own debt-service levy, which state law requires the city to set at 105% of the scheduled payment unless other money is pledged (Minn. Stat. § 475.61). That line will appear for the first time in the levy certified this fall.

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. What matters more is what's actually cushioning it. The city's general fund balance stood at $3,850,927 at the end of 2024 — about 16 months of operating expenses, above both the state auditor's 5-month recommended minimum and the city's own 12-month policy floor, per a 2024 council minutes (the March 26 audit presentation and the September 5 budget workshop). That's genuinely healthy, and it's the most recent figure that's been made public — no newer fund-balance number has surfaced since. What's thin isn't the general fund cushion; it's the money set aside on purpose for anything big. There's no separate capital reserve of any size to speak of, so equipment and facility needs get financed through bonding and state grants year by year rather than drawn from savings, and single-purpose funds like the Library and the Hallett Community Center run their own separate, persistently tight balances. And a healthy year-end number can still mask a tight year: 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 hasn't recurred since, but it's a reminder of how little slack this budget runs on even when the year-end total looks fine.

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.