The Palm Coast city administration is proposing to the City Council to keep the same tax rate next year as was adopted last September–$4.2570 per $1,000 in taxable value, or what would equate to a $638 property tax bill for a $200,000 house with a $50,000 homestead exemption.
The administration is presenting a $61 million general fund budget to the City Council at a budget workshop Tuesday morning. The council will decide on a maximum proposed tax rate for next year, ahead of public hearings later this summer, when it could adopt a rate lower than that decided now, but not higher. The council is expected to formally adopt the proposed rate at a meeting next week.
The $61 million general fund budget would include an increase of $5.6 million over the current budget but no increases in city staffing paid through the general fund. That staffing stands at 271. It does not include as many or more employees paid through other funds that don’t depend on property tax revenue or the general fund, such as the utility fund, the stormwater fund and building permitting.
But there’s an important caveat to the total number of personnel: while the administration does not propose adding personnel, it hired several employees halfway through last year, paying them for part of the year, and is now including their costs on a full-year basis. That’s raising administrative costs in different departments. For example, the city budgeted for additional firefighters on Oct. 1 and on April 1, according to the plan submitted Tuesday.
The city added a planning manager on Jan. 1, a third of the way into the year, and a new community development director a month into the fiscal year, plus two customer service representatives added in April. Next year, the budget will reflect their full year’s salary, even as the total number of personnel stays at 271 in the proposed budget.
By far the single-largest line item increase in the budget would be for public safety, starting with policing through the city’s contract with the Flagler County Sheriff’s Office, and the addition of nine deputies to the city’s contract, for a total of 57. That would push the city’s policing budget from $7.4 million to $9 million, a 21.6 percent increase. (The $9 million includes the cost of one deputy paid out of the Town Center Community Redevelopment Agency fund, which is outside the general fund.)
The increase includes contractual obligations for existing deputies. The fire services account for the next-largest increase, going from $13.2 million to $14.4 million, a 9 percent increase that includes that full-year cost of the three firefighters added halfway through this year. The increase also includes contractual obligations and increases in operational expenses.
Though the tax rate would remain the same, it would be considered a tax increase under Florida law, because the city as a whole would generate $5 million more in property tax revenue, thanks to a continuing surge in new construction and increasing property values. Most homesteaded property owners would not see their tax bill rise. To the contrary: because of the Save Our Homes cap limiting valuation increases to 3 percent, and when adjusted for inflation, the typical homesteaded property is paying less in taxes today that it did five years ago. The combined public safety budget increase accounts for half the overall increase in proposed city expenses.
Public works, parks and recreation account for another $1.1 million, with other, lesser expenses spread through other departments.
As it did last year, the administration may face a difficult road in convincing at least some council members to keep a flat tax rate. One of them, Ed Danko, who is running for a County Commission seat and has adopted a dogmatic, no-additional-tax approach, has spoken repeatedly about wanting to go back to rollback again this year.
The rolled back tax rate means that, excluding new construction, the city would take in the same amount of property tax revenue next year as it did this year, sparing taxpayers a tax increase. The County Commission has adopted modest decreases in the tax rate without going so far as adopting the rolled back rate, because demands on the county budget–like demands on the city budget–have been building, not decreasing. The city’s budget is calculated on the addition of some 6,000 residents, for a total of 107,000.
New residents, renters and commercial properties that do not benefit from the 3 percent Save Our Homes cap on increases in taxable valuations feel the effects of higher tax bills much more than homesteaded property owners.
Take City Council member Nick Klufas’s Southlake Drive homesteaded property. He paid $813 in city taxes in 2019. This year he paid $832. In inflation adjusted dollars, that’s $142 less than he paid in 2019.
If the council kept the tax rate the same next year, Klufas would pay, at most, $864, but probably less. It would still be well below what he paid in 2019, in inflation-adjusted dollars. If the council were to go to the rolled-back rate, his tax bill would drop from $832 to about $810. Klufas is also running for a County Commission seat, but he has tended to avoid dogmatism on taxes.
budget-proposal–palm-coast-2025
