Gainesville City Commission unanimously adopts maximum property tax rate 15% above the rolled-back rate

BY JENNIFER CABRERA

GAINESVILLE, Fla. – At the July 17 meeting, the Gainesville City Commission adopted a maximum property tax rate for FY2026 that is 7.2% higher than the current rate and 14.96% higher than the rolled-back rate.

“This is the maximum that we’ll be able to do. It does not mean we have to charge that much.” – Mayor Harvey Ward

Mayor Harvey Ward began by cautioning Commissioners that the decision before them was the maximum millage rate, “not every item on the budget. This is the maximum that we’ll be able to do. It does not mean we have to charge that much… I would prefer we not do the nuts and bolts of the whole budget.” The maximum millage rate will be sent out to property owners on their upcoming TRIM notices.

City Manager Cynthia Curry reminded Commissioners that they will be discussing the “nuts and bolts of the budget” at their July 31 meeting. 

Current rate is 6.4297 mills, property tax values are 9.3% higher than last year

Executive Chief of Staff Cintya Ramos said the property tax values are 9.3% higher than the previous year, which would generate an additional $1.7 million in property tax revenue at the existing millage rate of 6.4297 mills. She added that the City will see a reduction of $362,455 in half-cent sales tax revenue and an increase of $268,525 in state revenue-sharing. She added that the City’s indirect cost allocation study was completed, indicating that GRU should allocate an additional $391,214 to the City’s General Fund, but she said GRU will be paying “a budgeted amount that they developed, and that has resulted in a $1.3 million loss in direct cost allocation revenue to the General Fund.” 

Ramos said other miscellaneous adjustments had a net impact of adding $1.3 million in revenue to the General Fund, and the Employee Pension Plan actuarial report will allow the City to reduce expenditures by $510,000.

Current budget gap is $8.7 million; staff recommends increasing millage to 6.8912 mills

Ramos said the budget gap between revenue and expenses, as of July 17, was $8.7 million, so staff proposed an increase of 0.4615 mills, which would increase the property tax rate to 6.8912 mills, 7.2% higher than the current millage rate and 14.96% higher than the rolled-back rate of 5.9944 mills (the rolled-back rate would generate the same amount of property tax revenue as the previous year, given the increase in property values).

According to an analysis in the meeting’s backup material, the new rate would increase the taxes for a homesteaded property valued at $350,000 by $138.45, not including any increase in the home’s value over the previous year; homesteaded properties can only increase in value by 3% per year, but there is no cap on the taxable value of non-homesteaded properties.

Some cuts in Charter Offices are still being considered

Given that GRU has taken over some of the responsibilities of the Human Resources, payroll, City Auditor, City Clerk, and Equity and Inclusion offices, Curry said her staff has begun addressing the reduction in the need for those services and is still considering cutting the Fleet Replacement Fund. She said the City’s excess fund balance can be part of the “path to balance the budget, but the millage rate is always important.”

Proposed FY26 budget is $1.9 million higher than FY25 adopted budget but $1.25 million lower than FY25 amended budget

The chart above comparing General Fund budgets from FY24 to FY26 begins with the FY24 actual budget of $168,972,703, which was significantly higher than the FY24 adopted budget of $156,419,483.

The FY25 adopted budget of $155,368,126 was slightly lower than the FY24 adopted budget – a decrease of $1.1 million or 0.7%. However, the FY25 budget has since been amended to $158,536,642, which is $2.1 million or 1.35% higher than the FY24 adopted budget.

The proposed FY26 General Fund budget of $157,283,699 is $1.9 million or 1.2% higher than the FY25 adopted budget, but it’s $1.25 million lower than the FY25 amended budget.

Commissioner Casey Willits said, “Even though the 2026, for expenditures and revenues, is more than last year, knowing that last year’s was quite tight compared to the year before, I think I understand where we’re at; we do have some expenses that go up, that we’ve got to pay for.”

Where does Gainesville rank?

Commissioner Bryan Eastman said, “I always like pointing out to people… that we’ve always had below-average taxes, historically significantly below average taxes, for the top 20 cities in the state of Florida… But I will say that I don’t like taking this vote. I do feel like it is mostly out of our hands.” 

In FY25, Gainesville’s property tax of 6.4297 mills was higher than 295 of Florida’s 397 municipalities. Out of the 20 municipalities with the highest populations (Gainesville has the 13th-highest population), the average property tax rate for FY25 was 5.965 mills, almost half a mill lower than Gainesville’s, and 12 of those 20 municipalities had lower property tax rates than Gainesville.

City Commission’s formula for the General Fund Transfer

Eastman referred back to a formula that the City Commission established in April 2023, before the GRU Authority was established, that was “mutually agreed upon by Gainesville Regional Utilities and the City of Gainesville to pay a payment in lieu of taxes.” However, at that time, GRU was governed by the City Commission and GRU General Manager Tony Cunningham worked directly for the City Commission; the GRU Authority has never agreed to use that formula. The formula reduced the GFT from $34.3 million in FY23 to $15.3 million in FY24, and the GRU Authority has since reduced it to $8.5 million and will pay closer to $7 million in FY25 and FY26 after subtracting legal fees and other costs they believe the City should be paying.

Eastman: “As far as I’m concerned, this property tax increase is a temporary property tax increase.”

Instead of making this payment “in lieu of taxes,” Eastman continued, “Every time, [the GRU Authority keeps] cutting and cutting, kind of seeing the General Fund Transfer more as a slush fund to pay for, you know, this, that, or the other thing, as opposed to the steady income that a property tax would be. As far as I’m concerned, this property tax increase is a temporary property tax increase… As soon as we get back to the equation being honored, the equation that was accepted by the Auditor General, the equation that was praised by the bond ratings agencies, the one that brought us down to our historic debt reduction plan, that resulted in a bond rating increase by a bond rating agency, that’s what this tax increase is doing, and I’ll be very excited to bring it right back down as soon as that is honored again.”

Book: “The vast majority of all our increase is directly to staff, to people doing the work, and that’s really important.”

Commissioner Ed Book said that although the City has cut some employee positions, the main reason the budget is increasing is due to bargaining agreements to give raises to union employees. He said the raises provided to other employees “are in accordance and typically lower than the rate of inflation… The vast majority of all our increase is directly to staff, to people doing the work, and that’s really important… So we’ve done the right thing there, and the largest increase has typically been in police,… because they were well below market average, and then we did some things with our fire.”

Book continued, “I don’t like the [property tax] rate; I think it’s too much, and I think we need to decrease it some, but today is just setting our max.”

Motion

Commissioner James Ingle said he was looking forward to getting into the nuts and bolts of the budget but made a motion to accept the staff recommendation setting the maximum property tax millage at 6.8912 mills; there were multiple seconds.

Ward said the reduction in the General Fund Transfer “is the reason that I’m asking you to go to the polls in November.”

The motion passed unanimously.