Mayor Donna Deegan says a proposal on the November ballot for raising the homestead exemption would deal a “hit to core services” in Jacksonville if state voters approve it.
A City Council member says it would force deep cuts to the city’s spending on libraries, public works and parks.
Another council member says it will finally cause the city leaders to show fiscal restraint because the “only way to cut government is to starve it.”
Hanging over all of the uncertainty is the more immediate question of how to craft the coming year’s budget without knowing whether Florida voters will agree in November to a far-reaching change in property taxes that are the single biggest source of money for local governments.
The City Council Auditor’s Office and the Duval County Property Appraiser’s Office both project the city would lose about $300 million in property tax revenue. This year’s city budget is just over $2 billion.
Deegan said she intends to make the case for what the downside is for the constitutional amendment that Gov. Ron DeSantis pressed for and the Legislature agreed to put on the ballot.
“Clearly, we’re going to have to run some exercises on what we’d have to do in the event that we have a worst-case scenario,” Deegan said in a June 1 interview.
“But honestly, a lot of our work is going to be in partnering with police and fire and other organizations that know what a detrimental effect this is going to be,” she said. “It sounds awfully good to say we’re going to cut your property taxes by so much, but what are you going to lose for that?”
Council member: Only way to cut government is ‘starve it’
City Council members got their first crack at discussing the potential impact during a June 2 meeting of the Finance Committee.
City Council member Rory Diamond, who often votes against spending supported by the rest of council, said DeSantis and the Legislature reacted to a “lack of spine” by local officials on fiscal matters.
“The fear-mongering about police, fire, picking up the trash and roads is going to get dispelled,” he said of the November vote. “And then we’re going to do the one thing that this council has not had the guts to do which is say ‘no’ because we’re going to have to. The only way to cut government is to starve it.”
City Council member Will Lahnen brought some math to the discussion by outlining how the city would have to make a 38% cut in non-public safety spending to close the gap.
He said the city would need to look at spending on the Kids Hope Alliance and its youth programs, financial support for UF Health Jacksonville that is the safety-net hospital for treating poor patients, and nonprofit grants.
Lahnen said even if the city were to zero out all of its spending on nonprofits — a category that includes UF Health Jacksonville, Kids Hope Alliance, public service grants and arts and cultural grants — the city still would have to make 22% across-the-board cuts for non-public safety departments.
If Florida voters approve the amendment, the impact would start in the 2027-28 budget when the current $50,000 homestead exemption for non-school taxes would go up to $150,000. The exemption then would go up again to $250,000 for the 2028-29 budget.
The homestead exemption is for taxpayers who live in the home they own. It is not for rental property.
Lahnen said the city should assume Florida voters will approve the referendum and start preparing in the upcoming 2026-27 budget by avoiding any use of reserves for balancing the budget and instead keep spending at a level that adds to the reserves.
“When you know you have a revenue reduction, you say ‘no’ to any new incremental expenses and you start hoarding cash,” he said. “So I think that needs to be our strategy going forward, starting now.”
City Council member Ron Salem said it could mean the end of the city awarding multimillion completion grants for downtown development.
“There are various innovative ways that maybe we can use to support our development community, but we just can’t do in the same way we have been, in my mind, with what’s going on in Tallahassee,” he said.
State and Jacksonville split in 2008 on homestead exemption
The referendum is the first time the state has asked voters if they want to expand the standard homestead exemption since 2008 when they supported raising the exemption to $50,000 from $25,000 for non-school taxes. That constitutional amendment won 64% support statewide, though Duval County voters opposed it with 53% against it.
The measure on the November ballot would have to get at least 60% support from voters statewide to pass.
The proposed constitutional amendment does not shield any category of city spending from cuts, City Council Auditor Phillip Peterson said.
“I think everything is on the table,” he told the Finance Committee.
Finance Committee Chairman Joe Carlucci asked city Chief Financial Officer Anna Brosche if Deegan will present a single proposed budget to council in July or give council two different scenarios based on voters approving or rejecting the referendum.
Brosche said the Deegan administration is discussing what approach to take for her July 20 budget address.
“I do not have the strategy to deliver to you exactly how it’s going to unfold, just like you all are working through what you think is an appropriate approach for you all to have,” she said.
City Council president-designate Nick Howland, whose term starts July 1, said June 3 the summer budget workshops will prepare Jacksonville “for whichever decision voters make in November” by planning ahead and “living within our means.”
“This council will rise to that challenge and deliver a budget that is efficient, accountable and fiscally responsible,” he said.
Voters can expect high-stakes campaigns for and against
City Council member Ken Amaro said he thinks it’s an open question whether 60% of state voters will support the boost in the homestead exemption.
“Within the next few months, you can bet there’ll be a lot of money spent on television trying to persuade one side over the other, and it’s in that communication process that we’re going to find out what voters really think,” he said.
Amaro said if “there’s anything good that comes out of what’s taking place in Tallahassee, it’s going to force us to actually be fiscally conservative and spend wisely, if nothing else.”
Even without the prospect of a big increase in the homestead exemption, the city is facing slower growth in the property tax base. City Council member Rahman Johnson said people also are buying less so that affects sales tax collections and will require belt-tightening by the city.
He said council should understand why people are frustrated about property taxes but cutting programs that help people also is out of touch with the reality of what people are going through in their daily lives.
“I believe I am a conservative when it comes to many of the things that we spend, but I am not going to run around and think this council just frivolously spends dollars,” he said.
(This story was updated to add information and clarify City Council member Will Lahnen’s analysis.)
This article originally appeared on Florida Times-Union: Mayor Deegan and City Council grapple with possible property tax cut
Reporting by David Bauerlein, Jacksonville Florida Times-Union / Florida Times-Union
USA TODAY Network via Reuters Connect
By David Bauerlein, Jacksonville Florida Times-Union | USA TODAY Network
