The Jacksonville City Council Finance Committee launched hearings on Mayor Donna Deegan’s proposed 2025-26 operating budget Aug. 7 by backing a reduction in the property tax rate.
In the first of six scheduled hearings, the committee approved a motion by committee Chair Raul Arias to reduce the city’s ad valorem tax revenue by $13.4 million, which would equate to a one-eighth reduction in the city’s millage rate.
If adopted by the full Council, the rate would drop from 11.3169 mills to 11.1919.
With the vote, the committee will spend the hearings looking to balance the reduction by cutting $13.4 million from Deegan’s $2.02 billion proposed budget.
In addition, the committee voted to move $14 million in Council-controlled funding from the city’s Capital Improvement Plan to the operating budget. To offset that move, the committee will work to find $14 million in spending cuts in other areas in Deegan’s budget, although that amount could decrease due to a provision giving the district Council members discretion to move the funding back into the CIP.
Deegan’s proposed budget included about $110 million more spending than the Council-approved 2024-25 budget.
The increased spending was largely fueled by a $40 million, one-time contribution from city utility JEA, which provides the city with an annual payment.
In addition, tax revenue came in $20 million more than projected, and the city reduced spending by $40 million when Council reduced an annual subsidy to pay residents’ fees for trash hauling.
“Our constituents, our families, our friends, our neighbors are getting hit left and right by additional fees and taxes. It’s time for relief, and that time is now,” Arias said.
The millage rate is used to determine property taxes, with 1 mill equaling $1 of tax for every $1,000 of assessed property value.
For the owner of a property with an assessed value of $200,000 and a $50,000 homestead exemption, the annual tax savings would be $18.75.
Sides squaring off
Deegan, a Democrat, opposes a mill rate reduction, saying it would inhibit the city’s ability to meet the needs of a growing population while providing meager savings for taxpayers.
Six of the seven Finance Committee members are Republicans, including Arias.
His motion on the rate reduction passed on a show of hands, with only member Ju’Coby Pittman opposed.
Pittman, the lone Democrat on the committee, said she was concerned that millage rate reduction would come at the expense of social services such as public health while providing “really not all that much” in relief for taxpayers.
“Then we’re going to have a lot of sick people going to the emergency room, rather than doing tele(health) communications or even the clinics and working with the health department,” she said.
The committee voted to cut $2.1 million to support telehealth services.
Howland, the committee’s vice chair, argues spending can be reduced without significantly affecting city services. He said he would look for reductions in duplicated services, support for cultural organizations and direct contracts with service providers, among other areas.
“I know a lot of people say that (the millage rate reduction) is going to only result in a few dollars in the hands of every household in Jacksonville,” he said.
“But an extra dollar in the hand of a Jacksonville household is better spent than an extra dollar in the hand of government.”
Speaking to the media during the afternoon of Aug. 7, Deegan accused committee members of political grandstanding at the expense of the community.
"I am sincerely hopeful that once we get to the full Council, that we'll have less performers and more statesmen," she said. "This is clearly something that is just so fiscally irresponsible for us right now, and it, frankly, just doesn't give any tax relief to think of."
Mike Weinstein, Deegan’s chief of staff, urged committee members to be mindful of several looming expenses and obligations for the city in coming budget years.
Those include building a new jail at a cost that has been estimated as high as $1 billion, plus compensation increases approved in current contracts with police officers and firefighters. The city also could face further pay increases for those personnel when the next round of contract negotiations begins in the next year to 18 months.
Weinstein also noted that Florida Gov. Ron DeSantis and some state lawmakers have discussed reducing or eliminating property taxes in Florida, which would further reduce the city’s revenue.
While noting that a $13.4 million reduction “is not going to jeopardize a $2 billion budget,” Weinstein said, “I do want to caution that we have some formidable things coming.”
Capital project funding
As for the $14 million that the committee moved from the CIP to the operating budget, that funding comes from an allotment of $1 million for each of the 14 Council districts in the $300 million Community Benefits Agreement between the city and the Jacksonville Jaguars.
That agreement is connected to the deal between the city and the team to provide $775 million in public funding to transform the EverBank Stadium into the team’s “Stadium of the Future.”
Arias said that the transfer would allow the funding to be used to address homelessness and other social needs. It would still be available for infrastructure projects, but those would need to be paid from city coffers as opposed to being financed.
Millage rate debate
Heading into the budget hearings, at least six Council members had signaled support to reduce the city’s millage rate.
They included Arias, Howland and members Rory Diamond and Ron Salem, all on the Finance Committee.
Council President Kevin Carrico and member Terrance Freeman also said they would back a rate reduction from its current 11.3169 mills.
Diamond proposes a $100 million spending reduction, which would reduce the millage rate by about 1.
The city’s millage rate is one component of a property owner’s tax bill. Other public entities set mill rates, including school districts, water management districts, special districts and other municipalities.
Opponents of a rate reduction argue that Jacksonville already has the lowest rate of any large Florida city.
According to figures from Deegan’s office, the combined 17.865 millage rate of Duval County is lower than those of Miami (20.5564), St. Petersburg (19.5156), Tallahassee (19.2379), Orlando (19.1028) and Tampa (19.0437).
With mayoral and Council elections coming in 2027, opponents of a rate reduction say supporters are operating on a political motive to present themselves to voters as champions of tax reduction and fiscal conservatism.