Marco Island city officials are looking for money – to support needed infrastructure repairs, water-quality upgrades and city operations should Gov. Ron DeSantis’s property tax elimination plan come to fruition.
Marco Island stands to take about $2 million a year hit to its operating budget, said City Manager Casey Lucius.
Florida lawmakers are in a special session considering the governor’s proposal to significantly reduce or eliminate property taxes for many homeowners. Marco Island collects more than $20 million a year from ad valorem property taxes for its $33.7 million budget.
Suggestions for new revenue streams by Lucius and councilors on Monday, June 1, included buying a beach parking lot for sale in the city, putting a billboard up on city-owned property off the island and leasing out its use, and outsourcing the city’s police department to the Collier County Sheriff’s Office.
“We are in a crunch for revenue. We have to find ways to save money,” said Councilor Bonita Schwan. She asked that discussion of outsourcing police protection to the county be put on a future agenda. “I’m not saying we should do it. I just want us to gather information.”
Though the council on a 4-3 consensus said yes to future discussion, Council Chairman Darrin Palumbo said he would never consider it.
“I think it sends a horrible message to our police force that we’d actually consider going back to Collier County,” Palumbo said. “I would be hard pressed to even ever consider in my life. We want to talk about noise enforcement, go back to the county, it took 45 minutes to get an officer here unless it was something really really important. … I would never consider doing it.”
What is the governor’s property tax plan?
USA Today Network Florida reports that a package of proposals moving in tandem through the Legislature — a constitutional amendment from the House and an implementing bill from the Senate — together would significantly reduce property tax collections while also reshaping how local governments can raise and spend revenue. A full vote of the Legislature could come as early as today, Tuesday, June 2.
According to the governor’s office, upping it to $250,000 would wipe out the need to pay property taxes for 60% of Floridians who own a home and make it their main residence.
The Senate measure would cap how local governments adjust tax rates by tying them to the “roll-back rate” – the level that produces the same revenue as the prior year – and requiring supermajority approval to exceed it. Marco Island knows about rollback – having had eight years in a row before slightly raising the property tax rate for FY26.
The House proposal would raise the homestead exemption to $250,000 and start a process to eliminate taxes on primary residences, while also restricting remaining property tax revenue to “core” uses such as public safety, schools and infrastructure.
Not being able to raise property tax rates and losing homestead taxes could leave Marco Island in a bad place when it already is struggling to pay for staff costs, police pensions and needed capital improvements such as replacing bridges, paving roads, fixing its water quality issues and beautifying a tourist and snow-bird haven after multiple storms.
The city is still trying to make up for the loss of the 1-cent tax for capital projects that Collier County chose not to ask voters to continue. The tax had been in place since November 2018 and provided about $26 million to Marco Island during that time. It expired at the end of calendar year 2023.
If the measures are approved by the Florida legislature – barring any lawsuits – voters would consider the measure during the Nov. 3 general election.
Council, manager offer other revenue generating ideas
Lucius asked the city council to give her the OK to seek an appraisal on property for sale on the island used for paid beach parking. The two parcels, on South Collier Boulevard and known as the Turtle Lot, are for sale for $12 million.
The land includes a commercial parking lot of 84 spaces and a vacant commercial lot next to it. They are owned by Tailwind Marco LLC and Marco Holdings LLC, Lucius said. According to Collier County property tax records, the companies bought the parcels in 2024 for $11.25 million.
“I’m not suggesting any change to that parking lot,” Lucius said. “What I am suggesting is a potential revenue option that would not require any increase in millage and would not require any taxpayer dollars. The city would take out a loan to purchase the lots, and we would pay back the loan with the revenue generated from the parking lot. The revenue generated from the parking lot would be primarily tourists and visitors who come to the island to utilize the beach. Once the loan is paid off, that would be a forever revenue source for the city.”
At $10 an hour, the parking could bring the city $1 million to $2.5 million a year, while the estimate operating costs would be $82,000 a year, Lucius said. She also dispelled rumors of a parking garage being built, saying her suggestion is to keep the status quo of the flat parking lot.
The alternative, some councilors pointed out is that the commercially zoned property could be sold to a private developer who could build three stories of restaurants, parking, whatever fits the zoning.
In 2023, the city’s planning board recommended to the city council approval of a conditional use for a mixed-use proposal for a 50-foot-high mixed-use building with 14 three-bedroom units, 251 parking spaces and three restaurants with a combined total of 324 seats. The city council approved the proposal at its July 24, 2023, meeting, according to the minutes of that meeting.
The city would retain the space as a paid parking lot, Lucius said.
“What I’m looking for is a way to make up that potential deficit, and I’ve heard loud and clear from the city council and from our residents that whatever revenue options are presented should not place a burden on our residents,” Lucius said.
Councilor Deb Henry praised the idea.
“I just think this is a great idea, because it is something that the cost is totally covered by tourism and visitors to our island,” Henry said. “So, thank you so much for thinking outside the box.”
Councilor Rene Champagne, said he “would favor going forward” with “a great deal more work to make sure we’re comfortable with all the numbers.”
“But seems to me that makes sense,” Champagne said.
Councilor Stephen Gray said the idea is intriguing.
“I do respect the hell out of the fact that you are thinking about revenue raising opportunities,” Gray said. “But I do look at what the margin of what we’re really going to generate off of this and I’m pretty suspicious.”
Palumbo, who has filed to run for a second city council term, said the city would be more profitable if it buys the parking lot even without more cars parking there.
“We are not creating a parking lot for tourism, it’s already there,” Palumbo said. “The second we buy it, if not one single more parks and car parks in there this year, when we buy it next year, we’re still more profitable because we have tax advantages, property, and income.”
The council advised Lucius to have the property appraised.
Henry suggested putting a billboard at Collier Boulevard and U.S./S.R. 41 on property the city owns through its water and sewer authority. “You can bring in between two and $5,000 per month,” she said.
The council wasn’t interested in pursuing that idea, voting it down 2-5.
Keep the ideas coming, Palumbo told his fellow councilors.
J. Kyle Foster is a senior growth & development reporter for The News-Press & Naples Daily News. Reach her by emailing jfoster1@usatodayco.com.
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This article originally appeared on Naples Daily News: Marco Island council talks buying beach parking lot, outsourcing police
Reporting by J. Kyle Foster, Fort Myers News-Press & Naples Daily News / Naples Daily News
USA TODAY Network via Reuters Connect
