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Highland Beach advisory board hears unaudited FY2026 report and warns state homestead changes could cut millions
Summary
At a March meeting the Highland Beach Financial Advisory Board reviewed unaudited FY2026 figures and discussed a proposed state constitutional change expanding homestead exemptions that board members said could reduce town revenues by roughly $4.7 million under total elimination scenarios, forcing deep spending trade-offs.
Assistant Finance Director Matthews presented an unaudited budget‑to‑actual update for fiscal year 2026 covering Oct. 1, 2025–Jan. 31, 2026 and told the Financial Advisory Board that revenues and expenditures are tracking largely in line with expectations. “As of January 31, revenues total 13,500,000, representing approximately 73% of our annual projections,” Matthews said, adding that building‑permit and enterprise funds are performing within normal seasonal patterns.
Board members then focused on a proposed state constitutional change affecting homestead property taxation. A member estimated the town could lose about $4.7 million in property‑tax revenue under a full elimination scenario and stressed the difficulty of closing that gap. “If we were in today’s budget to lose 4.7, we would take us down to about 9,000,000,” one member said, adding that police and fire together represent a large share of fixed costs and that statutory constraints limit short‑term options.
Members discussed mitigation strategies, including limited increases to non‑homestead millage, use of budget stabilization funds, suspending large capital projects, and exploring allowable user fees or special assessments. Staff advised the board that many revenue lines are restricted by statute or are enterprise funds that cannot be repurposed; Matthews noted that some special revenues (for example trash) are dedicated and not generally available for general operations.
Board members also flagged timing risks: the measure as described in the meeting would require voter approval at 60% to amend the state constitution, and if placed on the November ballot it would compress local planning timelines. Staff said they will prepare a five‑year forecast and dashboard that tie quarterly financial statements to scenario planning so the commission and advisory boards can consider cuts or protective measures if the ballot measure advances.
The meeting produced no formal action on the topic; members asked staff for follow‑up analyses, including year‑over‑year comparisons and a draft scenario plan to present at a future session.
