Cottage Grove has a new property tax levy, approved at the Wednesday, Dec. 3 city council meeting.
Allowing a time for public comment prior to enactment, the new 2026 property tax levy was set at
$30,027,500 for the combined property tax levy, with the average median homeowner in Cottage Grove (defined as a home with $369,400 market value) seeing an annual increase from 2025 of $136 or thirty seven cents per day, with total annual city taxes of $1,418, following the decertification of a TIF District at the Dec. 2, 2025 Economic Development Authority meeting.
“These property tax statements that arrived in November, they will actually decrease, because of the decertification of that TIF District,” Cottage Grove Finance Director Brenda Malinowski said. “When a TIF District decertifies, those taxes that are being captured for that development are then put back on the property tax levy. Because of the action that happened that night, those taxes will go down,” after initially being set at $1,435 in annual city taxes.
“All homes and businesses will be afforded that reduction,” Malinowski said.
The 2026 property tax levy as passed breaks down as follows:
•$23,781,200 for general fund levy
•$70,000 for EMS levy
•$927,700 for Equipment Levy
•$450,000 for municipal building levy
•$187,500 for EDA levy
•$190,000 for Park Capital Levy, and
•$4,278,600 for the debt levy
For a property tax levy of $29,885,000. A separate HRA levy of $142,500 (up $5,000 from last year) brings the combined 2026 property tax levy for Cottage Grove to $30,027,500, a rise of $3,899,400 from last year.
Other budget highlights from the Dec. 3 budget hearing at city council include a new police officer (49th position, building inspector (funded with 2025 permit revenue), engineering technician (also funded with 2025 permit revenue), seasonal recreation positions, three six-month positions for park and a deputy director of public works - utilities, the last funded with utility fund revenue.
Family and medical leave will be paid .44 percent by employer and .44 percent by employee, with commodities and contractual services at 2.5 percent, representing no change.
“We kept that at 2.5 percent to keep property taxes as low as we could,” Malinowski said. “That is despite tariffs and supplies have just gone up. Our department directors and their teams were able to keep it at that 2.5 percent level so my thanks to them.” Some $2.37 million in snow equipment replace meant took place in 2025 with budget savings, meaning the amount needed for 2026 is less, amounting to $100,000 in budget impact after grants.
Total revenues with property taxes and other fees come to $31,143,700, matched by a like amount in expenditures.
The largest percentage of the city budget is dedicated to public safety (48.9 percent), followed by public works (19.07 percent), general government (12.28 percent), parks and recreation (11.89 percent), and community development (7.85 percent).
Motion to adopt the 2025 property tax levy collectable in 2026 was made by Council member David Clausen and seconded by Justin Olsen. A second resolution to adopt the 2026 budget was then motioned by Olsen and seconded by Clausen, followed by a resolution to adopt the HRA levy as proposed, motioned by Clausen and seconded by Olsen.
Also of note from Dec. 3 meanwhile was a public hearing was held for improvements to 80th Street South.
Presented by Cottage Grove City Engineer Paul Sponholz, the improvements to take place in 2026 will run from Highway 61 to Ideal Avenue and include interchange reconstruction and road rehabilitation for 80th Street South, along with turn lane extension and a new sidewalk near the highway.
Also included in planned road improvements to 80th Street South are dual left turn lanes off Hardwood Avenue, turn lane improvements near Crestview Elementary, and a signal replacement at Hyde Avenue. Included in the improvements as well are two southbound thru lanes on East Point Douglas Road, with road work extending to the T intersection near Arby’s.
The four lane divided roadway considered of critical importance is the most traveled in the city and sees 23,000 vehicles per day, with this expected to increase with development. The project which includes public assessments will take place in multiple stages. Public assessments will be assessed against commercial and other properties along the route, a public open house with more information planned for spring.
Construction depends on the contractor’s schedule but will tentatively start with the Northside ramps from Highway 61, with Stage 1 focusing on the east portion of 80th Street South and taking place from April to May, construction delayed in front of the schools until school is out. Stages 2A, 2B, and 2C will take place from June to August. Stage 3A will take place in August while 3B will run from August to October, Stage 4 from October to November, restoring traffic to their respective lanes.
“Throughout the project we’ll maintain some sort of access to all the businesses at all times,” Sponholz said. “We’ll maintain one lane of traffic in both directions for the west end of the project west of Hardwood Avenue, but on the east end traffic will only be allowed eastbound at times, the rest of it detoured.”
Total project cost for the improvements is $17,290,000, with $5 million in federal fund and the rest split between TIF ($1,807,150), MnDOT/County ($5,286,025), water and sewer utility funds ($50,480), Assessments ($1,549,400), and MSA funds ($3,596,945).
No one from the public spoke at the public hearing following explanation by Sponholz. Motion to approve 80th Street South improvements from Highway 61 top Ideal Avenue and East Point Douglas Road to T intersection was made by Council member David Thiede and seconded Clausen.
“If all goes well well we’ll get construction started in spring and wrap it up by November,” Sponholz said, a bid award to take place in March 2026 with public open house scheduled as well.
Special assessments will be made once total project cost is determined.