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Acting city manager warns homestead-exemption ballot measures could cut Palatka revenue by up to $586,000
Summary
An acting city manager told commissioners that two state ballot measures expanding homestead exemptions and changing assessment caps could eliminate most homestead city property taxes at full effect and reduce Palatka's revenue by about $483,000 in year one and roughly $586,000 in the second year if voters approve them.
The acting city manager briefed the commission on proposed state constitutional changes on the November ballot and the likely implications for the city's general fund. She said the measures, if approved, would enlarge homestead exemptions and tighten assessment caps, producing a multi-year revenue decline the city must plan for.
"The amendment would reduce the city's largest source of general revenue," the acting city manager said, adding that the estimated annual loss would be about $483,000 in the first year and roughly $586,000 in the second fiscal year if voters approve the measures. She said the change would cause 96% of homesteaded properties to owe no city property tax at full effect and estimated 1,661 homesteaded parcels would be affected compared with about 233 currently.
Why it matters: property-tax revenue funds core general-fund services. The acting city manager said the loss would be 11.7% of the city's levy in the second year and urged the commission to consider scenarios for balancing services and revenue.
The briefing also covered new administrative requirements the city would face if the amendment becomes law: a budget calendar filed by January 2027, a public exercise around a required 10% decrement, and posting standardized budget data and multiple years of history (the manager noted 5 years of retention for final budgets and amendments). She said a remote briefing with the city's lobbyist was scheduled the next day to clarify open questions about allowable uses of funds under the change.
The acting city manager recommended the commission give staff time to meet directors and roll up budget scenarios (current level of service, a 5% reduction, a 10% reduction) so the commission can adopt a balanced budget by the public deadlines. She emphasized the additional administrative workload staff will face implementing new reporting and public-engagement requirements.
Next steps: staff will attend a lobbyist briefing and return with scenarios so the commission can act at the July 23 meeting, when the maximum millage and the fire assessment will also be set.
