MARSHALL — Marshall city staff say they’ve been working to shrink Marshall’s proposed budget and levy for 2026. At the city’s “Truth in Taxation” meeting this week, ?? E.J. Moberg went over two different possible levy amounts.

First, there was the 7.5% preliminary levy brought forward earlier this fall. After additional work, city staff came up with a smaller, 6.59% proposed levy increase, Moberg said.

“At a council work session, staff received direction to continue to make adjustments to do what we can to lower that 7.5% increase level,” Moberg said. “Staff have worked on budget updates, and will propose a 6.59% increase when the final budget and levy are set next Tuesday.”

The city can adopt a final levy that is lower than the preliminary levy.

Moberg said the Truth in Taxation notices that Marshall property owners received used the 7.5% preliminary figure. Because of that, he went over two sets of budget and levy figures during Tuesday’s meeting.

Tax levy totals for the city have increased each year since 2022, according to data Moberg presented. The 2025 levy was about $9.86 million. With a 7.5% increase for 2026, the levy would be about $10.6 million.

That levy amount would break down to $7.3 million for the city’s general fund, $500,000 for capital equipment, $400,000 for street improvements, about $151,000 for the EDA and $2.27 million for debt service funds.

With a 6.59% levy increase, the 2026 levy would be about $10.5 million. That amount would break down to $7.19 million for the city’s general fund, $500,000 for capital equipment, $400,000 for street improvements, about $150,700 for the EDA and $2.27 million for debt service funds.

Moberg said some of the major factors affecting the city’s budget included personnel costs and health insurance costs.

“We did see an 11% increase in health insurance. Part of our savings when we approved the preliminary budget was we thought the health insurance was going to be a 13% increase,” Moberg said.

The city did plan to use reserve funds to lower the levy impact, Moberg said. With the proposed 6.59% levy, the city would use a planned $25,000 from Public Safety Aid to lower the impact of personnel costs for the Marshall Police Department. They would also use $13,000 in reserves for a transit bus request, and $30,000 in reserves for contingency funds.

Looking at Truth In Taxation notices that went out across Minnesota, the statewide average preliminary levy increase for 2026 was 8.7%, Moberg said. Among a group of cities comparable to Marshall, preliminary levy increases ranged from 6.7% in North Mankato, to 15% in Willmar and 14% in Worthington.

One Marshall resident commented at the hearing.

“I just think there’s some way, there has to be more controls over the budget process,” he said. “I’ve dealt with budgets all my life – private sector, public sector – and I’ve never seen preliminary budgets come in at double figures.”

The resident asked Marshall City Administrator Sharon Hanson if city department heads were given any guideline amounts that budgets were not to exceed.

“I’ll say that it’s an expectation that expenditure increases are always to be minimal. But I’ll also say that if you put out a percentage that’s just picked out of the air, it’s arbitrary and capricious, and it does not relate to reality,” Hanson said. “The reality is, we are mandated through union agreements for some of the benefits and the salaries. We have a lot of regulations that we need to comply with. And even on the comparison charts that E.J. showed, every city is different.”

The council didn’t take any action on setting a 2026 levy and budget at Tuesday’s meeting. The proposed budget and levy will come back before the city council at its Dec. 16 meeting.