PALM COAST — The City Council is considering where the government can save money as the threat of less property tax revenue looms in the background.
The board July 14 gave staff the green light to next week discuss a tentative 4.23 property tax rate for the 2026-27 fiscal year, which is estimated to generate nearly $46.6 million in general fund revenues.
The city staff-proposed tax rate is an increase from the previous year’s 4.09.
With projected increases in several departments for the upcoming year, some council members want to explore possible cost-saving opportunities, which they hope could lower the prospective tax rate.
The board’s inclination toward an austere approach this year is also due to the possible loss in property tax revenue in years to come – which officials say is possible if the state-proposed homestead exemption amendment passes.
The measure will come before Florida voters on the November ballot.
What is on Palm Coast’s budget for fiscal year 2026-27?
The total general fund expenditure for the next year is projected to be $72.2 million, according to a presentation to the City Council July 14.
That represents a 6.8% increase over the 2025-26 budget, which had a total expenditure of $67.7 million.
Among city departments, some notable increases this year include public safety.
Palm Coast’s contract with the Flagler Sheriff’s Office would cost approximately $12.1 million – a roughly $971,000 increase over last year. The fire department’s budget would increase from $16.3 million to $17.2 million.
Some of the other main expenditures also include:
County property appraiser says homestead exemption could ‘hurt’ city finances
Invited to share his thoughts on the potential impacts of the proposed homestead exemption amendment, Flagler County Property Appraiser Jay Gardner said “this is going to be something that hurts.”
“This is them taking revenue away from you guys, or you can look at it that they are giving homesteaders a break,” Gardner said. “This is a tax shift. You are taking me and giving me a break and making somebody else pay for it, or a cut in services.”
According to the city staff presentation, a $150,000 homestead exemption increase in 2027 would result in a revenue loss of $9.2 million, while a $250,000 exemption in 2028 would result in a $15.9-million loss.
Gardner also cautioned against what he called the “misconception” that the amendment would guarantee funding for core services, such as public safety, or give protection to small businesses.
“If you don’t have any money, you can’t write a check,” he said. “It does not ensure anything.”
Palm Coast City Council talks balancing taxes, services and revenue
Mayor Mike Norris agreed with Gardner, adding that “it’s not for me to decide on what the constituents vote on.”
“If the majority of the people want to vote (for the exemption amendment), we are going to work with what have,” Norris said. “It really is a tax burden shift … we have to hold the line this year and see what happens with the election and the referendum.”
Councilman Charles Gambaro also agreed with the property appraiser’s assessment and the dilemma ahead for the board.
“Do we increase the millage just a little bit, or do we cut services? That’s kind of the choice of where we’re at,” Gambaro said.
Vice Mayor Theresa Pontieri said she recognizes “the impact that this will have” but encouraged the city go back to prioritize funding for “core government” functions.
“I do think it’s important our government start to plan, one way or the other, for these fiscal impacts,” Pontieri said.
The vice mayor argued that parts of the budget that could see cuts include code enforcement operations, costs related to the Southern Recreation Center, adjustments to merit pay increases within staff, and other items.
Councilman David Sullivan urged the board to be “careful this year in making significant changes” since “we don’t know what’s going to happen on the (homestead) exemption amendment yet.”
“We can always cut back on things if we have to,” Sullivan said.
The board will consider adopting a tentative tax rate, as well as provide further budget feedback to staff, during its July 21 meeting.
— Brenno Carillo is a local government reporter covering Flagler County, including Palm Coast and Flagler Beach, for The Daytona Beach News-Journal.
This article originally appeared on The Daytona Beach News-Journal: Palm Coast proposes 6.8% budget increase. How might it impact taxes?
Reporting by Brenno Carillo, Daytona Beach News-Journal / The Daytona Beach News-Journal
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By Brenno Carillo, Daytona Beach News-Journal | USA TODAY Network
