Okaloosa County administrator recommends holding property-tax and MSTU rates as revenues slow

Mister Hofstede, the county administrator, told the Okaloosa County Board of County Commissioners at a budget policy workshop April 15 that his office will build the coming year's budget assuming the current property-tax millage of 3.8308 mills and the MSTU rate of 0.299 mills remain unchanged. "My plan and my direction to our staff is hold the line on that property tax millage," he said.

Hofstede framed the recommendation around a mixed revenue outlook and the county's existing reserves. He said state sales-tax receipts and other state-shared revenues have shown a recent flattening, and noted several revenue streams that have levelled or declined, including local option fuel taxes and state revenue sharing. He also reminded the board that potential legislative changes in Tallahassee, such as expanded homestead exemptions, could reduce county revenue and require the county to identify offsetting revenue or cut services.

The county's current total budget for the year under discussion is roughly $648 million; the general fund portion is about $176 million. Hofstede said property-value growth this year is estimated at roughly 6.4 percent, which he said would generate roughly $7 million in additional revenue, but cautioned that projections could change. He reported the county's general-fund reserve has grown in recent cycles and now stands at roughly $36 million after a period of rebuilding following the 2007'2008 recession.

Hofstede outlined major predictable uses of available revenue next year, including a planned $48 million of general-fund supported capital projects and ongoing debt-service obligations. He also summarized existing local revenue sources that support infrastructure and public works: the county levies the full first local option gas tax (up to 6'cents) and part of the second LOGT (3'cents of the allowable 1'5'cents), and it participates in local sales-surtax collections tied to a county-level surtax passed by voters.

The administrator noted the county enacted a local surtax in 2018'2019 and that the revenue stream from that surtax has helped fund a backlog of stormwater, transportation and public-safety capital projects. He said staff will bring a proposed project list later this year and that any renewal of the surtax will require a referendum and a state audit process; "we would be prepared for a November referendum," he said.

Hofstede asked the board for feedback and signaled staff will proceed to department-level budget meetings in the weeks ahead. The formal tentative millage-rate setting and budget hearings will follow the standard public-notice process this summer.

Ending: The administrator's recommendation to keep millage and the MSTU steady will guide department budget development; staff will return with more detailed revenue forecasts and project lists during July workshops and in the August'September hearing cycle.