Despite budgetary pressures that include meeting rising demand for city services in the face of a shortfall in projected property tax revenue and the depletion of federal pandemic relief funding, Jacksonville Mayor Donna Deegan is challenging City Council members to increase city spending in the coming fiscal year.
On July 15, Deegan presented Council a proposed $1.92 billion 2024-25 budget that exceeds the adopted 2023-24 version by $165.18 million.
She also presented a $1.95 billion 2024-29 Capital Improvement Plan that includes $489 million in first-year spending, a more than $65 million increase over first-year expenditures in the current CIP.
With the proposed budget and CIP in hand, Council will now analyze it in coming weeks. A final Council vote is expected in September in advance of the start of the city’s fiscal year Oct. 1.
Deegan’s second proposed budget and CIP came after a fiscal year in which the city’s ad valorem (property) tax revenue grew by $73 million but was $62 million short of projections, according to a fact sheet provided by Deegan’s office.
Meanwhile, the city faces an increase in spending for infrastructure improvements and city services amid population growth of 17,000 people in the past year, Deegan said.
In addition, the city enters its 2024-25 fiscal year with an agreement to provide $775 million in public funding to remake EverBank Stadium into the Jacksonville Jaguars’ “Stadium of the Future” and to spend $56 million to develop riverfront parks and improve the stadium-adjacent flex field.
Deegan’s proposal does not include a tax increase. It does call for a $47 million expenditure of operating reserve funding to purchase public safety vehicles and equipment, provide a loan fund for affordable housing and pay for Downtown Investment Authority one-time development grants and other economic development grants and loans, among other items.
“Jacksonville is on the precipice of greatness and the time is now to choose what kind of city we want to be,” she said during her budget presentation, held in the Council chamber at City Hall. “Now is not the time to withdraw from our bold vision. It’s thinking small that has kept us mired in mediocrity – a city with more potential than progress. We were elected to do hard things. We have to be smart and we have to lean in.”
Deegan said the budgetary pressures forced her administration to prioritize “the vital over the important” in funding needs such as public safety, affordable housing, homelessness services and infrastructure.
The proposed budget, which would supplant the 2023-24 version as the largest in city history, drew immediate concern from Council member Ron Salem, chair of the Finance Committee, over the use of operating reserves.
“I just believe reserves are there for emergencies and should not be used in general for budgetary reasons,” he said. “In general, without looking at the specifics, using reserves to help balance the budget is problematic for me.”
In an X post shortly after the presentation, Council member Rory Diamond called Deegan’s proposal “wildly irresponsible.”
“Money just thrown everywhere, at anything,” Diamond’s post read. “Higher taxes are coming to Jacksonville if the Republican super-majority doesn’t act. And, we will.”
Diamond has not voted in favor of a city budget as a Council member, voting no on Republican Mayor Lenny Curry's budgets three times. He was absent for Deegan's budget vote last year on military duty.
Budget highlights
Deegan’s proposal includes funding for 40 new police officer positions for the Jacksonville Sheriff’s Office, which would be funded under a portion of a 6.28 million increase in salaries for JSO patrol and enforcement operations. Other public safety expenditures include $28 million for construction of new fire stations; and $138,119 for additional security for the courthouse, Lonnie Miller Park, Friendship Fountain and the skate park at the Artist Walk plaza under construction under the Fuller Warren Bridge.
Riverfront and resiliency expenditures in the budget include $14.3 million in 2025 and $37.59 million overall for the Metropolitan Park marine fire station, museum and dock. The city would provide $3 million in 2025 and $50 million total for the proposed new Museum of Science & History on the Northbank.
Deegan would provide $24 million for improvements to city parks and public swimming pools, plus $4.2 million in 2024 and $5.5 million total for the Oceanway and Beaches locations of the Jacksonville Public Library.
Other improvements include $25.1 million in renovations to the Ritz Theatre, 121 Financial Ballpark and VyStar Veterans Memorial Arena, with additional funding in the five-year CIP for ongoing repairs and maintenance.
Deegan seeks $62 million in 2025 funding for road construction, drainage, pedestrian crossings and sidewalks.
To support economic development, Deegan includes finding for two positions that would support an overhauled city procurement process while also providing $10.5 million for previously approved DIA completion grants and forgivable loans plus $24 million in Office of Economic Development grants, loans and other city funding for companies that relocated to Jacksonville or operations in the city.
The proposed budget includes $56 million for UF Health Jacksonville to provide indigent care, plus $38 million in 2025 and $24 million annually thereafter to continue UF Health’s capital improvement plan.
To address homelessness, the budget would include $10 million on a program to bring Jacksonville into compliance with a new state law prohibiting homeless individuals from camping and sleeping on public property, including city streets, sidewalks and parks. That law is scheduled to take effect Oct. 1.
Deegan said the total cost of the program would be $15 million. She said she was expecting private funding to cover the additional $5 million and was in discussions with potential contributors.
The administration hopes to avoid building a tent city for homeless people, Deegan said, and instead provide housing by “putting people into vacant hotel rooms and things like that.”
“There are a number of different aspects we’re looking at,” she said.
In addition, Deegan would spend $300,000 for eviction prevention services and $10 million in city seed money for a public-private affordable housing loan fund. She said the seed funding was designed to attract an additional $30 million in private and philanthropic investments that would generate $120 million in new multifamily rental housing that could potentially provide for more than 1,000 units of affordable housing.
“Even before this fund is created, Jacksonville will have nearly 4,000 affordable and low-income housing units completed by the end of 2025 because of our strong focus on addressing this challenge,” she said.
The budget also would provide $7 million in arts funding to the Jacksonville Cultural Council and $7.2 million in public service grants.
Spending the reserves
According to information provided by her office, Deegan’s plan for spending of operating reserves is as follows:
• $4 million loan to the Jacksonville Port Authority.
• $10.5 million for public safety vehicles and equipment.
• $10.5 million for DIA one-time development grants.
• $11 million for economic development grants/loans (Office of Economic Development).
• $10 million for housing loan fund for affordable housing.
• $1 million loan to public buildings to connect to JEA chilled water to reduce future utilities expenditures.
The city has $389 million in reserves. Deegan said her plan would leave 26.2% of the city’s budget in reserve, more than twice the 10% target recommended by city ordinance.
She said the city had dipped into reserves in eight of the past nine years to meet its needs.
The revenue picture
Addressing why revenue fell short of projections, Deegan partly blamed a drop-off in valuation of commercial properties in Jacksonville, where work-from-home policies instituted by companies during the pandemic have resulted in a high vacancy rate that has reduced demand for office space.
She also cited increases in insurance rates and a “rebalancing” of the residential and home rental market for contributing to the less-than-projected tax revenue. In Duval County, the median price of homes sold in June increased 1.8% from June 2023 after posting double-digit percentage increases during the two previous year-over-year periods.
In a July 11 news release tied to June research on the local housing market, the Northeast Florida Association of Realtors said the market had “stabilized” as “interest rates that hover around 7% may be finally catching up with buyers.”
The disappearance of anticipated revenue occurred after a year in which the city spent the last of its pandemic relief funding. At the start of the 2023-24 budget year, the city had $64 million in remaining coronavirus pandemic relief funding from its share of the $1.9 trillion federal American Rescue Plan.