Next year's city budget will keep same property tax rate while boosting spending

( This story was updated to correct a misspelling/typo )

Jacksonville City Council will vote Tuesday on a budget that mostly keeps what Mayor Donna Deegan rolled out in July but has some notable changes after the council's Finance Committee dialed back how much the city will pull from its cash reserves and cut what Deegan wanted for affordable housing and homeless programs.

Finance Committee Chairman Ron Salem called it the most challenging budget he's worked on in his five years on council because Deegan sought to use $47 million from the city's operating reserves to balance her budget blueprint. The Finance Committee's version of the budget that council will vote on Tuesday uses nearly $10 million from reserves, an amount Salem said is in line with past budgets.

Deegan has said that even after drawing $47 million from the reserves, the city still would have had twice as much socked away as the target for that financial cushion.

"We have to continue to do the things that move our city forward," Deegan said at a recent speech to the Rotary Club of Jacksonville. "And it does not make any sense to me to leave more money in our reserves than we need while our growing city, which grew by more than 17,000 people in the past year, is starved for services."

Her proposed budget had a $1.92 billion general fund for operations that would have been a 9.4% increase over the general fund for the current year's budget. The Finance Committee's budget has a $1.88 billion general fund that is a 7.1% increase.

Salem said the Finance Committee's budget enables the city to pay for historic pay raises for public safety employees while taking less from the city's reserves. He said the Sheriff's Office has needed to mandate overtime in order to staff the jail to the point "it was almost becoming a crisis over there."

"I think the historic increases to police and fire, which is the primary function of this government in my mind, will pay dividends for this community long term," he said.

Property tax rate will stay the same

City Council will meet earlier than usual Tuesday when it convenes at 3 p.m. rather than its standard 5 p.m. starting time. The head-start will give council time to go through the budget ordinances including any amendments proposed by council members.

The proposed budget doesn't contain an increase in the property tax rate or the garbage fee. The garbage fee hasn't increased since 2010 even as the cost of collecting household garbage and curbside recycling has gone up substantially.

On the big question of what people will pay in property taxes, the Finance Committee agreed with Deegan on keeping the property tax rate at $11.32 per $1,000 of taxable property value for areas excluding the three Beaches cities and Baldwin. Even with no change in the tax rate, the city will gain about $73 million in property taxes because of rising real estate values and new construction.

The Save Our Homes state law will limit the increase in the assessed value of owner-occupied homes with homestead exemptions to 3%. Other limitations on will cap the increase for non-homestead properties to 10%.

"We had a very challenging budget this year with the millage rate what it was just to try to balance the budget and stop the use of reserves," Salem said. "Keeping the millage rate flat like we did, you're getting additional revenue because one of the major initiatives that came through the budget process was police and fire."

Police officers will get an initial 13% pay raise starting Oct. 1 for the 2024-25 budget. They would get another 5% pay raise in the second year of the contract and a 5% raise in the third year. Corrections officers would get pay raises of 15% the first year, 8.5% the second year and 7% the third year.

The city has struggled to recruit corrections officers. Their starting pay will go from $48,000 to $60,000 on Oct. 1. The agreement with the Fraternal Order of Police also will boost starting pay for police officers, rising from $52,000 to $65,000.

Firefighters will get a 12% pay raise in the first year followed by 5% raises each of the following two years.

Finally, the labor agreements will put new police and firefighters hires into the Florida Retirement System in 2027, bringing back pensions for public safety employees a decade after the city ended them in 2017 for new hires. Corrections officers also might go into the state retirement plan.

Salem said the combination of pay increases and the the return of pensions will put Jacksonville on the same footing as other Florida counties when it comes to recruiting and retaining public safety employees. He said the early results have shown a spike in interest in police and correction officer jobs.

"We were losing people," he said. "They're training here, getting all the experience in Duval County, and then they're leaving for one of the surrounding counties to get a traditional pension. So now we've kind of stopped that."

UF Health Jacksonville will get record subsidy for medical care

Deegan and the Finance Committee also agreed on a $56 million subsidy for UF Health Jacksonville's daily operating expenses, an increase from $40 million this year and twice what the city's contributed just five years ago. Salem said the city has an obligation to help the safety net hospital provide medical care to the poor.

He said it also strengthens the bond between Jacksonville and the University of Florida for high education in Jacksonville, both at UF Health Jacksonville and for the university's proposed construction of a new graduate campus for degrees.

"They've become a real partner with us," Salem said. "The UF campus is an indication of how the University of Florida views us now."

He said in addition to the planned graduate campus, the University of Florida also is a "major player" in health care by training medical students, nursing students and pharmacy students in Jacksonville.

"We ought to be a medical mecca here in Jacksonville," Salem said. "We've got Mayo Clinic. We've got UF Health. We've got other institutions here and Jacksonville is developing a real reputation for health care excellence."

Deegan and council split on financial reserves and housing programs

The city has had a surge in property taxes and that has helped boost how much money gets socked away in its reserves.

The emergency reserve, which the city does not touch unless it's needed for something like a hurricane hitting Jacksonville, has grown from $65 million in 2020 to about $125 million in July.

The operating reserve, which the city does draw from for various spending needs, has increased from $210 million in 2020 to $345 million in July. Deegan proposed pulling $47 million from operating reserves, partly to pay for affordable housing and homelessness programs.

Deegan proposed $10 million for an affordable housing program by Self-Help Ventures Fund that would attract tens of millions of dollars from non-profit organizations. The Finance Committee eliminated the $10 million though Deegan might come back later and seek the funding through stand-alone legislation.

Salem said the details of that program were not "fully vetted" with City Council in the months leading up to Deegan's budget address in July. He said if Deegan can provide information and justification for the program, City Council might be open to putting in a smaller amount at the start along with some restrictions recommended by the City Council Auditor's Office.

The Finance Committee cut $10 million Deegan sought for homeless programs down to $1 million. Deegan unveiled her 12-point program in July to expand existing homeless shelters, support the Jacksonville Sheriff's Office Homeward Bound program and add options for emergency housing.

Pay raises: Deegan says people want "safe streets" and new labor contract will help Sheriff's Office

Big tickets: The 25 largest construction projects in Deegan's budget topped by stadium, UF Health and fairgrounds

She said it is the city's response to the new "anti-camping" state law banning people from sleeping in public spaces. The goal "is not just about keeping people off the streets" but to help them "become viable members of our society," Deegan said.

He said the city can spend much less than the $10 million sought by Deegan and still comply "with compassion" to the state law.

"I think ending homelessness is beyond the role of government," Salem said.

As for the money in the operating reserves, Salem said the amount currently held by the city translates to about two months of operating expenses for the city. He said the City Council Auditor recommends that threshold and he plans to file legislation that would set that ratio as the target for the city.

This article originally appeared on Florida Times-Union: Jacksonville City Council set to approve 2024-25 budget