NEW SMYRNA BEACH — The City Commission Tuesday night, Sept. 23, approved a 4.64 property tax rate – maintaining the current fiscal year’s figure – and approving a slightly smaller budget compared to 2024.
The 2025-26 fiscal year operating budget is $199,507,823, which represents an approximately 3% decrease compared to the previous fiscal year, according to JoAnne Drury, the city’s finance director.
The maintained 4.64 tax rate adopted is 5.4% above the rolled-back rate of 4.40. The rolled-back rate is the amount required to bring in the same level of revenue in the next fiscal year.
With property values expected to increase 7.58%, according to a presentation Drury made in a July workshop budget session, homeowners could see a tax increase this year, if their property value has gone up.
The 4.64 tax rate “is necessary to support a balance general fund budget,” Drury said during Tuesday’s meeting.
“This has been a very good budget process,” said City Manager Kevin Cowper at the meeting.
Cowper said that the budget addresses the city’s strategic priorities for the next year, including maintaining a “high-performing organization” by filling staffing needs, prioritizing public safety and continuing to address flooding mitigation efforts.
“I feel very good about where we are,” he said. “We are not increasing the millage rate. The revenues from property taxes are increasing, but that is based on property values and the increase there. That is a good thing all around — the economy is good, property values in the community are stable and increasing, which is good, and we are able to provide the services that we need to for our community within those confines.”
The general fund, the largest pot of money in the budget, is set at around $76,646,231. Those funds are destined for several different operations, such as public safety expenses, which amount to more than $25 million — 34% of the general fund budget.
Other notable expenses are related to stormwater, including capital project funds, which amount to around $24 million. Several such projects, including the Corbin Park stormwater improvements project and a similar effort on the historic westside, are partly funded through state and county grants.
City reserve funds are now reflected in the budget
A significant change from the past fiscal year budgets is the inclusion of reserve funds into the total operating budget number. Last year’s approximately $139-million budget, for instance, did not reflect reserve funds already owned by the city, which amount to approximately $50 million, Drury during the workshop session.
“While the city has always maintained reserves in its bank accounts, the city’s specific amounts set aside to meet the commission’s reserve targets were not previously reflected in the budget itself,” Drury said.
According to a presentation from Drury, the Government Finance Officers Association recommends that two months or 16.67% of budgeted expenditures be reserved to mitigate current and future risks,” such as revenue shortfalls and unanticipated expenditures.
For this year’s $76 million general fund budget, for instance, $13.6 million in reserve funds are reflected in the total.
NSB tax rate remains among lowest in Volusia
The new adopted tax rate “supports” the city’s “strategic priorities” for the general fund, which also includes a recent pay study that was used to help staff “plan and (develop) a strategy to ensure employees’ pay and benefits are at a competitive level,” according to a city document.
Results of the study made it possible for the city to agree to new police and firefighter union contracts, which the City Commission signed off during the meeting.
It also accounts for and covers an increase in insurance premiums, the addition of six new positions in the Public Works Department and one in Capital Projects Management Division.
The 4.64 tax rate is among the lowest in Volusia County. Only DeBary, with 3.4, Ormond Beach, with 4.01, and Daytona Beach Shores, with 4.59, have rates lower than New Smyrna Beach.
According to a presentation from Drury, property tax revenue increased from around $30.7 million in the 2025 budget to the estimated $33.2 million for the next fiscal year.
This article originally appeared on The Daytona Beach News-Journal: NSB sets nearly $200M budget, residents could see tax increase
Reporting by Brenno Carillo, Daytona Beach News-Journal / The Daytona Beach News-Journal
USA TODAY Network via Reuters Connect
