State Auditor Julie Blaha Releases Annual Financial Report on Minnesota Cities - February 26, 2021

Contact: Donald McFarland | 651-236-0494

Saint Paul, MN – Earlier today, State Auditor Julie Blaha released the 2019 Minnesota City Finances Report. The Report was compiled from 2019 city reporting forms, financial statements, and audits. The Report summarizes the current and long-term trends for city revenues, expenditures, and debt.

“The 2019 report is a key source for exploring the financial trends in cities prior to the COVID-19 crisis,” said State Auditor Julie Blaha. “While the strain on city finances caused by the COVID-19 pandemic remains on-going, this report shows robust growth for cities in both revenues and expenditures in the year prior.”

The 2019 Minnesota City Finances Report shows revenues increased by 6.7 percent and expenditures increased 7.2 percent. Among revenues, investment earnings had the highest percentage increase year over year while intergovernmental revenues showed the largest dollar increase. For expenditures, streets and highways showed the largest dollar increase while culture and recreation had the largest percentage increase.

Current Trends

  • Total revenues of the governmental funds for all Minnesota cities totaled $6.24 billion in 2019, an increase of 6.7 percent over 2018 revenues. Total revenues of cities over 2,500 in population increased 7.1 percent, and revenues of cities under 2,500 in population increased 1.6 percent over the two-year period.
  • In 2019, total expenditures of the governmental funds for all cities totaled $7.09 billion. This represents an increase of 7.2 percent over 2018. Total expenditures for cities over 2,500 in population increased 7.6 percent, while those under 2,500 in population increased 3.9 percent over the two-year period.
  • Overall, small cities tend to carry a greater debt burden per capita than large cities. In 2019, small cities carried long-term debt of $1.36 billion, or $3,805 per capita, compared to $8.07 billion, or $1,865 per capita, for large cities.

Longer-term Trends

  • Over the ten-year period of 2010 to 2019, an examination of city revenues shows that, when adjusted for inflation, revenues increased 10.2 percent.
  • In actual dollars, the proportion of total revenues derived from property taxes grew from 37.9 percent in 2010 to 40.5 percent in 2019. During this same time frame, revenues derived from intergovernmental sources decreased from 25.9 percent of total revenues to 23.4 percent.

Governmental Expenditures

  • Between 2010 and 2019, when adjusted for inflation, expenditures increased 8.5 percent over the ten-year period. Over the same period, actual total city expenditures grew from $5.38 billion to $7.09 billion. This represents an increase of 31.8 percent.
  • Although inflation-adjusted total expenditures increased 8.5 percent over the ten-year period, a comparison of the two five-year periods of 2010 to 2014 and 2015 to 2019 reveals a significant reversal during the most recent period. From 2010 to 2014, inflation-adjusted total expenditures decreased 2.7 percent, while from 2015 to 2019, inflation-adjusted total expenditures increased 8.1 percent.

To view the complete report, which includes an Executive Summary, graphs, and tables, click here.