St. Augustine staff warns $7.8 million hit if state eliminates homestead property taxes

The City Commission of St. Augustine heard a detailed budget briefing Thursday at a special meeting on how pending state proposals to change homestead property-tax rules could affect city services.

Assistant City Manager Meredith Bridal told commissioners the city’s total 2026 budget is about $99.3 million and that the general fund — the portion most affected by property-tax law changes — is roughly $51 million. “The city of St. Augustine's revenue from homesteaded properties consists of $7,800,000 in 2026,” Bridal said, calling that number a “highest worst-case scenario.”

Bridal summarized four measures being discussed in the state legislature: HJR 201 (an immediate elimination of non-school property taxes on homesteads), HJR 203 (a phased 10-year phase-out), HJR 205 (an exemption for homesteads owned by people age 65 and older) and HJR 209 (an increase in the homestead exemption by up to $200,000 for non-school levies). She said HJR 205 would be an estimated $780,000 hit to city revenue and that HJR 209 could reduce revenue by about $4.5 million.

Bridal warned that public-safety budgets for police and fire are statutorily protected and cannot be reduced under the proposals staff had seen. That protection, she said, would leave roughly $23 million of the general-fund budget available to absorb the loss; taking $7.8 million from that pool would, by Bridal’s estimate, require cutting about 73 of the roughly 118 positions funded in whole or in part by property taxes. “This would result in a need to reduce 73 of the 118 positions that you see here,” Bridal said.

Commissioners pressed staff on options for replacing revenue. Bridal and the city manager said the city cannot unilaterally create many new local taxes — state authorization would be required for a new local food-and-beverage tax or similar levy — and that sales-tax distributions to the city are determined by county formulas and population share.

Bridal also outlined which departments would face reductions if the city lost the homestead revenue: city commission and administration offices, communications, human resources, grants, historic preservation and archaeology, planning (though building-permit and short-term rental fees often fund parts of planning), finance and IT, public works and grounds, events and facilities. She noted some services that are funded by user fees — water, sewer, parking, the marina and the visitor information center — would not automatically be cut, but shared internal services (for example fleet maintenance) could lead to indirect impacts on enterprise operations.

Members of the public urged targeted relief and fiscal scrutiny. Susan Gregory told commissioners, “Frustration around property taxes is real,” and urged the city to address tax inequities that she said are driven by tourism and limited opportunities to expand the tax base. Davania Bell said, “from my number crunching, it looks like the city's ad valorem tax revenue has increased by 55% since 2019,” and asked the commission to examine spending alongside revenue growth. Jeffrey Leibovitz said seniors on fixed incomes are seeking relief and argued spending restraint as a priority.

Bridal said the estimates are preliminary and that timing matters: a phased bill under discussion would not go into effect until 2027 and would start affecting the city’s budget in fiscal 2028. She said the city will return to the commission with more detailed breakdowns and options as legislators act and the budget process continues.

The commission did not take any votes at the meeting. The special session concluded with staff committing to follow up with more granular analyses and to present potential revenue and fee adjustments as part of future budget discussions. The commission adjourned.