SLEEPY EYE — After discussion Tuesday, the Sleepy Eye City Council unanimously approved setting a 12.5% 2026 preliminary tax hike.

Sleepy Eye City Manager Bob Elston initially recommended a 9.76 preliminary tax increase that would have boosted the city levy 9.76 percent, from $1,849,700 to $2,030,256 for 2026. That increase would have boosted annual property taxes on a home valued at $150,000 by $100 and $175 on a home valued at $250,000.

Elston said a 9.76 percent increase keeps up with inflation by adding $180,556 in total revenue to the 2026 city budget.

“We have investments like the pool (water park) and bike trail that need updating. It boils down to what we need,” he said.

Councilor Scott Krzmarzick said he was interested in increasing taxes now to reduce future costs.

“A percen

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