The Flagler County Commission on Monday voted to give its constitutional officers an extra month–until June 1–to turn in their proposed budgets for the fiscal year beginning Oct.1, ahead of what County Administrator Heidi Petito described as a year of “uncertainty.” The commission also appeared to agree, without a formal vote, to reduce the tax rate next year, though that may end up being more of a symbolic than an substantial reduction.
Each of the constitutional officers, with the exception of the tax collector–whose office generates its own fees–submits a budget to the commission for approval. They include the sheriff, the property appraiser, the supervisor of elections and the clerk of court.
“We’re going to continue to be mindful of those economic impacts that we face as we move forward with some degree of uncertainty,” Petito said. She provided a very rough outline of budget challenges ahead, without numbers just yet–and no dire predictions. “As a coastal community, we do want to ensure that we’re continuing to strengthen the reserves and that we have effective financial planning.”
The “uncertainties or unknowns” the administrator referred to “will continue to become clearer as we move forward with our budget development,” she said. Some of the biggest unknows may be coming from legislation making its way through current session in Tallahassee.
One of those possibilities is House Joint resolution 7015, which would raise the homestead exemption from the current $50,000 to $75,000. The Florida Association of Counties opposes the legislation. It estimates that by the third year, it would cost local governments over $800 million in ost revenue. Petito estimates it would cost Flagler County $7.7 million in lost revenue. The legislation has not advanced through committees. If it does and clears both legislative chambers, it would have to be approved by voters, with a 60 percent majority, on the November 2024 ballot. It would not take effect until the 2025-26 fiscal year.
There may also be increased demands on local governments for contributions to the Florida Retirement System, the pension system for retired employees. That would have another big impact on the budget.
“I get a lot of questions about why the city did rollback, why don’t you do a rollback?” Commissioner Greg Hansen said, referring to the Palm Coast City Council’s decision last year to reduce its tax rate to rollback–meaning that the tax rate would generate the same amount of money this year as it did the last. It was the first time Palm Coast did so in a flush year. (It had gone to rollback during the housing crash, but in order to safeguard revenue, not reduce it.)
“Well, that’s why right here, we can’t afford to do that,” Hansen said, “because of the increases that are forced upon the five of us to deal with, that we have no control over. It’s just added expenses and they’re large, they’re large expenses. It’s a shame that the public doesn’t participate in our budget procedures like I wish they would, but those are the issues that we have to explain.” (See: “What is the Roll-Back Rate in Property Taxes?“)
Palm Coast’s decision to go to rollback was controversial and not entirely intended, because it reduced expected city revenue by $2.7 million. But it was a strategic misstep by the council. Several of its members had planned to impose a utility tax to make up for the loss in property tax revenue. It did not work out as planned, as other council members opposed the switch. Instead, the council ended up stuck with a vote to rollback the tax rate. (See: “Palm Coast in Ugly Meeting Votes to Lower Tax Rate Substantially and Add New, Modest Fee for Now” and “Impacting Services, Palm Coast Cuts $2.7 Million from Initial 2024 Budget to Comply with Council’s Lower Tax Rate.”)
Petito said the intention this year is to “do our best to reduce the millage,” meaning the property tax rate. But as in previous years when the county has done so, it would not be a return to rollback, but more like a small, symbolic reduction in the tax rate, even though by law it would still amount to a tax increase, since the adopted rate would bring in more revenue than the previous year.
For all the commission’s talk of reducing the county’s property tax rate, that rate has not substantially changed over the past 10 years, mostly fluctuating within a range of $8.33 per $1,000 in taxable value (the current rate) and $8.72. (Those numbers include all county taxes, including debt servicing and the voter-approved ta for environmentally sensitive lands.) The difference, for a $300,000 house with a $50,000 homestead exemption, has been slight: about $100, out of a county tax bill of slightly more than $2,000 for the year. With inflation taken into account, the purchasing power of the county’s revenue has declined more sharply than its tax rate.
Tax-wise, the commission will be holding a workshop on the long-running special tax, or assessment, imposed on properties in Daytona North (or the Mondex) for road maintenance. There is some interest on the commission to get rid of the assessment, or shift more general fund revenue toward maintenance in Daytona North, which would impact the budget.
That would be a reversal from the administration’s attempt last year to double the assessment, which has not been increased since 1993. The typical assessment is $80 per property. The doubling did not go into effect. Instead, it triggered serious opposition from Daytona North residents and Commissioner Leann Pennington, and a push to rollback the assessment or do away with it.
The commission is also holding a series of workshops to consider the possibility of a special taxing district for beach protection.
The public will have a dozen opportunities to address the commission during the budget process through workshops and meetings. But few residents turn up for those meetings.