Oakland budget workshop: staff warns proposed state property-tax amendment could slash ad valorem revenue

Town of Oakland finance staff told the commission on June 23 that a proposed state constitutional amendment on the November 2026 ballot could materially reduce the town’s primary revenue source and force difficult choices.

“At a high level, this proposal represents one of the most significant property‑tax changes in Florida in decades,” the town manager said, summarizing the amendment’s main provisions: an expanded homestead exemption (as much as $150,000 in 2027 and $250,000 in 2028 for non‑school levies), a reduction in annual assessment growth caps for non‑homestead property from 10% to 5%, and new restrictions on how local governments may use property‑tax revenue.

Finance Director Gabby Leon then walked the commission through the general‑fund preliminary budget for FY 2026–27. She said the proposed budget is built on a 6.7 millage and projects $11,208,819 in general‑fund revenues, with ad valorem property taxes accounting for roughly 59 percent (about $6.6 million). Leon flagged a $124,000 contingency, a 3 percent cost‑of‑living adjustment for employees, an 18 percent retirement contribution for sworn officers and an estimated 9.5 percent health‑insurance increase.

Using the amendment scenarios, staff modeled worst‑case projections that show ad valorem revenue falling sharply in subsequent years. Leon summarized the town’s projection work and warned commissioners that, under the modeled assumptions, the town could face a $255,000 shortfall in FY 2027–28 and about $595,000 in FY 2028–29 unless offsets are found.

Commissioners and members of the public pressed staff on options to close the gaps. Resident Ed Kulikowski asked what millage would be needed to restore revenue; Leon said she had not yet run a millage calculation but would produce the numbers for the next meeting. She noted a recent change in the state rollback‑rate calculation and a statutory limit that would constrain increases (a threshold near 10 percent that, if exceeded, would require an explicit commission vote).

Town leaders discussed alternatives including modest millage changes, non‑ad valorem service assessments for stormwater or fire, and recovering costs for services that have long been provided town‑wide (for example debris pickup or backflow testing). The town manager emphasized the need to avoid disproportionate burdens on businesses or renters and directed department heads to look for recurring savings and fee‑recovery opportunities.

Staff also warned that reserves are not a sustainable long‑term fix: current reserves are roughly 16–20 percent of expenditures and are held to meet GASB standards; finance staff said dipping into reserves would quickly erode the town’s ability to handle emergencies.

The workshop concluded with staff assigning homework to commissioners to review department reductions and additions before a follow‑up workshop scheduled for July 28; staff committed to running millage scenarios and returning with numerical options.

What’s next: staff will provide a millage‑impact calculation and preliminary analyses of non‑ad valorem fee options at the next workshop; the commission will consider those options before setting the tentative millage rate and budget schedule.