Ask most people why Bloomington's property taxes should be manageable and you'll get the same answer: the city has Mall of America. A tax base that size, the thinking goes, should let homeowners coast while retail, hotels, and the airport corridor absorb the load. It's a reasonable assumption. It's also not how the last two budget cycles actually played out.
In the fall of 2025, Bloomington's finance staff put a number in front of the city council that had nothing to do with retail or hospitality revenue: a possible 17.92% increase to the 2026 property tax levy. The driver wasn't Mall of America traffic or hotel occupancy. It was the scheduled expiration of state and federal grant dollars that had been funding the department's newer firefighters. A staffing cost, not a commercial vacancy, is what nearly doubled the size of a typical annual levy increase.
What the commercial base actually does
The premise isn't wrong. Bloomington's combined commercial and industrial tax base, anchored by Mall of America, a deep bench of hotels along the South Loop, and an industrial corridor near the airport, ranks third in scale among a comparison set of six Twin Cities-area cities, behind only Minneapolis and St. Paul and well ahead of similarly sized suburbs. That base gave Bloomington enough cushion to come through the pandemic years without the kind of structural erosion Minneapolis and St. Paul have seen in their downtown office values since.
What that base doesn't do is insulate residential taxpayers from a single large personnel-cost cliff inside a single budget year. When a specific revenue stream, in this case federal and state staffing grants, runs out, the city still has to fund the positions it already hired for. That cost gets spread across the levy the way any other operating cost does, commercial base or not.
How 17.92% became 6.96%
The council and city staff agreed early on that a nearly 18% increase wasn't going to happen. What followed was a fairly public exercise in trimming, and the specifics are worth knowing if you're trying to understand how much control a city actually has over its own levy in a given year.
Staff identified $7.4 million in reductions by working four levers at once:
- Scaling back and delaying capital and debt-funded projects
- Reducing the Normandale Lake tax district's own levy
- Applying part of a 2024 budget surplus toward the 2026 gap
- Lowering personnel costs and finding health insurance savings
One of those cuts is specific enough to be genuinely useful as an example. The Normandale Lake District Plan had included a pedestrian bridge over the 84th Street and Normandale Boulevard intersection. City staff ran the numbers and determined it didn't clear a cost-benefit threshold, so the bridge was formally removed from the plan in fall 2025 specifically so the project could be, in the city's own language, deprogrammed financially. That single move cut the district's levy by about $200,000 for 2026, down from an original forecast of $450,000 that was projected to climb to $900,000 in future years. A pedestrian bridge that didn't get built is doing more to hold down a piece of your tax bill than the mall's foot traffic ever will.
Those four levers together brought the preliminary levy down from 17.92% to 9.44%, approved by the council on September 8, 2025. The final number, approved December 15, 2025, came in lower still at 6.96%, about 2.48 percentage points under the preliminary figure and below the 8.7% average preliminary increase reported across Minnesota cities for 2026. For the owner of a median-valued Bloomington home, that final number works out to roughly $124 more per year, or about $2.39 a week.
Here's how that compares to the run-up in Bloomington levy increases heading into this cycle:
| Levy Cycle | Increase |
|---|---|
| Three cycles back | 7.97% |
| Two cycles back | 9.15% |
| Prior cycle (2025) | 9.18% |
| 2026, preliminary | 9.44% |
| 2026, final | 6.96% |
The pattern that jumps out isn't a steady climb. It's volatility driven by specific, nameable line items, not a slow drift you could predict from the mall's revenue reports.
Why the citywide number isn't the number that matters to you
Even a perfectly explained citywide levy figure understates the range a buyer actually faces, because Bloomington's tax bills vary a lot by ZIP code. Recent property tax data shows the city's highest median tax bill, around $5,984, sits in ZIP code 55438, while the lowest, around $3,449, sits in 55420. That's not a small spread. It's roughly a 73% difference in what two median households pay for city, county, and school services depending on which part of Bloomington they're in.
That gap tracks home value and housing vintage more than anything specific to the levy math above. ZIP 55420 covers some of the city's older, denser housing stock near the airport and the South Loop, where home values run lower. ZIP 55438 sits toward the Eden Prairie border near Hyland Lake Park Reserve, where lots are larger and homes tend to be newer and more expensive. If you're comparing a listing in one part of Bloomington to a similar one a few miles away, the tax line on your closing disclosure can move more than the sale price difference would suggest.
What this means if you're comparing Bloomington to a neighboring suburb
If you're pricing out Bloomington against Eden Prairie, Richfield, or another west metro suburb, the commercial-base argument is real but incomplete. It's a long-run structural advantage, not a guarantee against any single year's levy swing. The more useful questions to ask before you commit to a specific address are:
- What ZIP code is the home actually in, and how does that compare to the citywide median tax bill?
- Has the relevant tax district (Normandale Lake, for instance) recently cut or added a capital project that affects its portion of the levy?
- Is the city currently absorbing a one-time cost, like an expiring grant, that might not repeat next year?
None of these show up on a listing sheet. They show up in city council packets, mayor's budget memos, and county tax records, which is exactly where this research came from.
A quick FAQ
Does Bloomington's tax rate compare well to other west metro suburbs? Bloomington's approved 2026 levy increase of 6.96% came in below the statewide average preliminary increase of 8.7% for Minnesota cities, and its own preliminary figure was cut down from a fall 2025 forecast of 9.44%. Direct year-over-year comparisons to specific neighboring suburbs depend on each city's own levy cycle, which is worth checking city by city rather than assuming a fixed ranking.
Why did the levy forecast start so high? The early 17.92% projection was driven primarily by the scheduled expiration of state and federal grant funding that had been supporting newer firefighter positions, a cost the city had to absorb into its ongoing budget once the grant money ran out.
Where does the city's share fit into my total tax bill? The city's portion is roughly one-third of a typical Bloomington property tax bill. The remaining two-thirds goes to Hennepin County and Bloomington Public Schools, both of which set their levies independently.
Should I expect this kind of swing every year? Not necessarily. The 2026 cycle was shaped by a specific, identifiable cost, an expiring grant program, rather than a recurring structural issue. Past years show smaller, steadier increases, which is part of why this year's preliminary jump stood out enough to require a public course correction.
If you're weighing a move into Bloomington, or trying to figure out why two homes with similar price tags carry different tax bills, I'd rather walk through the specific ZIP code and district numbers with you than leave you guessing from a citywide average. Let's Connect.
