The property tax rate in Duval County will remain unchanged over the next year after the Jacksonville City Council gave final approval Sept. 24 to the city’s 2024-25 fiscal year budget.
On a 16-1 vote, Council approved a $1.88 billion general fund budget that increases operational funding by 7.1% over the $1.75 billion budget approved for 2023-24.
Council also approved a five-year capital improvement plan that includes $489 million in first-year spending.
The finalized budget provided most of what Mayor Donna Deegan included in the $1.92 million budget blueprint she delivered to Council in mid-July, including increased outlays for new contracts for emergency responders and corrections officers.
But it also reflected cuts recommended by the Council Finance Committee to Deegan’s proposed $47 million in spending of operating reserve funds.
That committee gutted several high-priority items from Deegan, including $10 million in seed money for a public-private fund for affordable housing and all but $1 million of a proposed $10 million outlay for homelessness services to bring the city into compliance with a new state law banning camping on public property.
Voting yes on the budget: 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.
Member Rory Diamond cast the lone no vote, saying the city was outspending its resources.
“The Donna Deegan deficits have arrived,” he said. “This is going to put us in the red next year and the year after and the year after. Your property taxes are going up. There’s no way we can spend like this and not increase property taxes.”
Diamond, elected to Council 2019, has never voted in favor of a city budget. He voted no on Mayor Lenny Curry’s budgets three times and was absent for Deegan’s budget vote last year on military duty.
Members Terrance Freeman and Mike Gay were not present for the vote.
A ‘pro-public safety’ budget
During the budget process, Deegan and Council faced a challenge in how to pay for several large new expenditures in a year when property tax revenue fell short of projections. The city collected $73 million more in property tax in 2023-24 than the previous year, yet fell about $62 million short of projections due partly to a softening of commercial property values.
In Jacksonville and other metros across the country, demand for commercial property has dropped due to high vacancy rates brought on by remote work policies held over from the coronavirus pandemic.
The 2024-25 budget includes increased compensation for the Jacksonville Sheriff’s Office, Jacksonville Fire and Rescue Department and corrections officers. New contracts with bargaining units for those personnel call for:
• A 13% pay raise for police officers and a 12% pay raise for firefighters starting Oct. 1, with 5% increases in 2025-26 and 2026-27.
• A 15% pay raise for corrections officers in 2024-25, plus 8.5% the second year and 7% the third year.
Deegan and Council members agreed the new contracts were needed to attract and retain emergency responders and corrections officers.
“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.”
This year’s flat millage rate is also expected to generate an increased amount of property tax, due to rising property values and new construction in a fast-growing community that attracted about 17,000 new residents in the past year.
Although the millage rate remains flat at 11.3169, property owners whose assessed property value increases will pay a higher tax bill next year. A mill is $1 of tax per $1,000 of assessed property value.
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.
Sparring over one job
Before approving the budget, Council and the mayor’s incoming chief of staff, Mike Weinstein, sparred during discussion of an amendment by Council member Johnson to raise the employee cap in the mayor’s office by one person to retain Parvez Ahmed, currently Deegan's chief of diversity and inclusion, as a data analyst.
The Council Finance Committee had removed his position at the lead of members who opposed city spending on diversity, equity and inclusion efforts.
Weinstein said the position would not affect the city budget, because the salary for the chief of staff position can be used for it. That is because Weinstein is being paid through his former position in the Department of Finance versus the mayor’s budget.
“We want the position back, we don’t want any money and we want to be left alone,” Weinstein told Council.
Council member Rory Diamond said Johnson’s amendment “is about putting something back into the budget that we took out.” Member Kevin Carrico said the amendment “seems like a reaction to not getting your way, and I’m not going to support it.”
The debate included a disagreement between father-and-son Council members Matt and Joe Carlucci over whether Council was overstepping into the mayor’s authority.
“We’re in the mayor’s lane. We should not be in the mayor’s lane,” Matt Carlucci said. “There’s a separation of powers, and we need to respect it.”
“We’re not going into the mayor’s lane,” Joe Carlucci countered later, arguing that Council had authority over the city’s budget, including the mayor’s budget.
Joe Carlucci said he supported the position, however, saying he had read the data analyst job description and saw nothing in it about DEI.
Council approved the amendment on a show of hands, with yes votes from Johnson, both Carluccis, Amaro, White, Boylan, Lahnen, Pittman, Gaffney and Clark-Murray.
The no votes came from Diamond, Carrico, Arias, Salem, Howland and Miller.
In related action, Council approved four other amendments that added about $139,000 to the budget. Most of that was an appropriation of $65,749 for dues for the Florida League of Cities and $30,479 for dues for the National League of Cities.
Debating reserve fund spending
In presenting her proposed budget, Deegan said the city was carrying a more than adequate level of reserves and should spend some on one-time needs such as the affordable housing fund, grants for Downtown revitalization projects and incentives for economic development projects elsewhere in Duval County, and purchasing public safety vehicles and equipment.
Going into 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.
Likening the operating reserves to a family’s savings account, Deegan said it would be fiscally responsible for the city to use some of the funds to cover one-time expenses.
To bolster her argument, Deegan noted that Fitch Ratings had upgraded the city’s credit rating from AA- to AA+ while S&P Global Ratings and KBRA reaffirmed ratings of AA for the city. Her administration said the credit ratings were a sign that analysts considered the city’s financial house to be in good order.
But some Finance Committee members disagreed with Deegan’s stance on the reserves, and pointed to other signs of rough financial waters ahead. Those opposing Deegan noted that incoming tax revenue fell short of expectations and that Council auditors were projecting deficits ranging from $44 million to $105 million through 2029.
Some committee members said reserve spending also would be foolhardy considering the city’s commitments to provide $925 million in tax dollars toward a stadium upgrade for the Jacksonville Jaguars and a companion community benefits agreement.
Council members approved both the $775 million stadium deal and $150 million benefits agreement, which will be matched by $625 million from the team on stadium improvements and $150 million on benefits.
In a series of budget hearings, the committee sliced all but $1.73 million of Deegan’s proposed $47 million in reserve spending before adding back $5.3 million proposed by Deegan and about $4.6 million for several priority items for various Council members.
The committee’s approved version of the budget included $9.995 million in reserve expenditures, which was in line with reserve spending in the last 12 years. Over that time, the average annual spending is $9.8 million.
Howland said the city’s financial picture and uncertainties about the broader economy made it critical for Council to keep tight control of expenditures and prioritize spending carefully.
“We cannot control the money supply, we cannot control the price of fuel and we cannot control global security, but what we can control moving forward is our spending,” he said.
Before the Council’s final budget vote, Peluso said he was “upset” with the Finance Committee “for cutting so many things that are necessary,” including funding to address homelessness and affordable housing.
“I think the Finance Committee probably went a little too crazy early on,” he said, adding that he hoped Council would consider supporting increased funding for homelessness and affordable housing in coming years.