Another budget season is in the books for the city of Jacksonville, which entered its new Oct. 1-Sept. 30 fiscal year with a $1.88 billion general fund budget and $1.95 billion five-year Capital Improvement Plan.
With the Sept. 24 City Council vote finalizing the budget and CIP, Mayor Donna Deegan and Council members held the line on the city’s property tax millage rate while making new investments in public safety and maintaining city services in a growing community.
But looming payouts on several big-ticket expenditures and a need to build a new jail that could cost more than $1 billion have prompted questions about whether the city has hit its spending limit minus a tax increase in future years.
Here is an overview of this year’s budget and a look at the city’s financial picture going into 2025.
As Council member Nick Howland pointed out, the approved budget included about 98% of what Deegan proposed in the $1.92 billion budget blueprint she submitted in mid-July.
Howland made the remark in reaction to the Deegan administration lamenting cuts made by Council members.
The $1.88 billion budget is the largest in city history, surpassing the $1.75 billion 2023-24 version.
Council also passed a five-year, $1.95 billion capital improvement plan.
Among other highlights, the budget and CIP included increased compensation for police officers, firefighters and corrections officers, funding for 40 new officer positions for the Jacksonville Sheriff’s Office, $28 million for construction of new fire stations and a record $56 million to UF Health Jacksonville to support indigent medical care.
“This is a very pro-public safety budget,” Matt Carlucci said.
“Think of what we’ve done for public safety this year, in terms of raises, in terms of an additional 40 police officers, new fire stations. We have done a lot.”
Deegan had proposed spending $47 million in the city’s operating reserves on items she said she prioritized as “the vital over the important.”
That included $10 million in seed money for a public-private affordable housing loan program and $10 million for homelessness services.
The approved budget contains just under $10 million in spend-downs of operating reserves. It eliminated all but about $5.3 million of Deegan’s items and contained $4.6 million of expenditures added by Council members.
Among the cuts were all but $1 million for homelessness services and the entire $10 million for the affordable housing loan.
Entering the budget discussions, the city had about $345 million in operating reserves and $125 million in emergency reserves. The operating reserves were up $29 million from 2023.
Deegan had argued that it was financially responsible for the city to spend some of the reserves for one-time needs.
Council member Ron Salem, chair of the Finance Committee, led a charge to keep the reserves mostly intact in order to provide the city with about two months worth of operating funding.
The budget holds the property tax millage rate at 11.3169, but that doesn’t necessarily equate to a flat tax bill for property owners.
A mill is $1 of tax per $1,000 of assessed property value. Property owners whose assessed property value increases will pay a higher tax bill next year.
For residential property owners who occupy their homes and have a homestead exemption, state law caps property tax increases at 3%. For properties without a homestead exemption, there’s a 10% maximum increase.
Although the millage rate is staying flat, the city is expected to gain $70 million-plus in revenue over the next year. That’s mostly due to rising property values and new construction in a fast-growing community that added 17,000 residents in the past year.
The budget included funding for new three-year contracts with the Fraternal Order of Police Lodge 5-30 and International Association of Fire Fighters Local 122 that will provide compensation increases for thousands of first responders and corrections officers. The breakdown:
Police: 13% in 2024-25, followed by 5% in both 2025-26 and 2026-27.
Firefighters: 12% in 2024-25, followed by 5% in both 2025-26 and 2026-27.
Corrections: 15% in 2024-25, followed by 8.5% in 2025-26 and 7% in 2026-27.
The FOP represents about 2,500 officers in Jacksonville, including corrections officers.
The IAFF represents about 1,730 emergency responders in Jacksonville.
The FOP agreement raises pay for newly hired police officers to $65,000 from $52,000, and boosts pay for new corrections officers to $60,000 from $48,000.
Deegan and Council members agreed that the increases were needed to attract and retain employees and maintain public safety.
The final Council vote was 16-1, with member Rory Diamond opposed and members Terrance Freeman and Mike Gay not present.
Yes votes came from President Randy White and members Kevin Carrico, Ken Amaro, Raul Arias, Michael Boylan, Matt Carlucci, Tyrona Clark-Murray, Joe Carlucci, Ju’Coby Pittman, Nick Howland, Reggie Gaffney Jr., Rahman Johnson, Will Lahnen, Chris Miller, Jimmy Peluso and Ron Salem.
It was the fourth time Diamond had voted against a budget since being elected to Council in 2019. He has never voted in favor of one.
On the night of the vote, the longest discussion on the budget wasn’t about dollars and cents.
Rather, it was on an amendment by Johnson on raising the employee cap in Deegan’s office to 23 after the Finance Committee had cut it by one to eliminate the chief of diversity and inclusion position held by Parvez Ahmed.
Committee members opposed to diversity, equity and inclusion policies had spurred the cut. Johnson’s amendment prompted a debate about whether Council was overstepping its boundaries as the legislative branch by dictating the staffing of the executive branch.
Opponents of the amendment argued that Council was within its check-and-balance limits. Proponents said, in essence, that Council should give the mayor latitude in deciding how to do the job she was elected to do.
Mike Weinstein, Deegan’s incoming chief of staff, put his opinion simply.
“We want the position back, we don’t want any money and we want to be left alone,” he said.
The change to the cap required no increased spending, as the mayor will retain current chief of staff Darnell Smith’s compensation in her budget with Weinstein continuing to be paid out of the Finance and Administration Department, where he’s currently assigned.
After some pointed comments and feisty back-and-forth between Weinstein and Council members, Council approved the amendment on a 10-6 show of hands. It allows Deegan to reassign Ahmed as a data analyst.
Before the vote, Council also approved four mendments that added about $139,000 to the budget.
Most of that was an appropriation of $65,749 for dues to the Florida League of Cities and $30,479 for dues tofor the National League of Cities.
The money will come from a $1 million Council contingency fund in the budget, and will not add to the expenditure of operating reserves.
The 2024-25 fiscal year marks the start of pay-up time on several major new commitments.
They include a 30-year stadium agreement with the Jacksonville Jaguars in which the city will contribute $775 million, plus $150 million in city funding for a companion community benefits agreement for which the team also will provide $150 million.
In addition, the new contracts for first responders and corrections officers will cost $54.4 million in their first year, $21.1 million in the second and $20.2 million in the third.
The city also must make good on $35 million of previously approved incentives for Downtown Investment Authority and Office of Economic Development grants.
Although tax revenue grew by $73 million in 2023-24 over the previous year, it fell $62 million short of projections as the city encountered new realities in the commercial and residential real estate markets.
Valuation of commercial properties sagged as work-from-home policies instituted by the pandemic drove up vacancy rates and reduced demand for office space. Residential valuations also dropped as the housing market cooled following two years when the median price of homes sold in Jacksonville increased by double-digit percentages.
Those trends aren’t expected to change significantly over the next year. Revenue is likely to increase again, thanks to the population growth that is driving new construction and steady demand for resold homes, but likely at a similar level to this year.
Bills are coming due, some of them big. Population is expected to keep growing, requiring the city to spend more to provide services.
The city jail, formally the John E. Goode Pre-trial Detention Facility, is past its prime and needs to be replaced, with options that include building a $1 billion-plus campus-type facility away from Downtown.
Affordable housing and homelessness need to be addressed, especially in light of a new state anti-vagrancy law requiring cities and counties to ban camping on public property.
Meanwhile, revenue increases are expected to be modest.
Crunching these factors, Council auditors projected deficits ranging from $44 million to $105 million through 2029.
“The Donna Deegan deficits have arrived,” Diamond said before the final vote. “This is going to put us in the red next year, the year after, the year after. … The Deegan doomsday for your property tax is coming. Your property taxes are going up. There is no way we can keep spending like this.”
Lahnen, in an interview after the vote, described the situation as serious but manageable if Deegan and Council members keep a tight lid on spending.
“Some of my colleagues say we’re broke,” he said. “I don’t agree that we’re broke. We have a healthy balance sheet. We have a lot of operating reserves right now. But we become broke if we continue toward the deficits that were presented to us.”
Lahnen plans to focus on incentives for Downtown Investmentn Authority and economic development projects. With few exceptions, Council routinely approves incentive packages that include completion grants that come due years after the development agreements are finalized.
If Lahnen has his way, the days of no-sweat approvals for incentives will be over.
“If you look in the next couple years, a lot of the unique expenses we have are completion grants that have already been approved by this Council and prior Councils,” he said.
“So as these completion grants come before Council, I know myself and other Council members are probably going to scrutinize them to a higher degree to make sure it is truly a good return on investment for the city if we invest this money.”