Commissioners weigh fire‑assessment options as proposed homestead exemption threatens $8M revenue hit

City staff presented commissioners with a range of options Tuesday as they wrestled with how to replace millions in potential property‑tax revenue losses if two proposed state constitutional amendments pass.

Finance Director Joe Truery told the New Smyrna Beach City Commission that increasing the homestead exemption and capping assessed‑value growth for non‑homestead property could reduce city property‑tax revenue by “approximately $4,650,000 in the first year and an additional $3,400,000 in the second year” for a cumulative loss of roughly $8,000,000. He said that because residential properties generate a large share of taxable value, those constitutional changes would substantially affect the city’s long‑term revenue outlook.

To address the possible shortfall, staff presented a fire‑assessment study that would create a dedicated, segregated special revenue fund and could only be used to fund Basic Life Support (BLS) services under Florida law. Truery said the full implementation scenario would generate about $10.2 million annually beginning in FY2027; a phased option (25% in year one, reaching 100% in year four) would generate roughly $2.5 million in year one and scale up thereafter. The assessment is tiered by residence size and by property type; staff showed residential annual rates ranging from about $304 to $426 under the full plan and multifamily unit rates of about $268–$317.

Commissioners debated two related choices: whether to phase the assessment in to align with the phased homestead exemption changes, and what to do with the city millage. Staff outlined three millage options for the full assessment scenario: keep the current millage (4.637 mills), reduce millage to a revenue‑neutral level (approximately 3.3478 mills), or set a rollback rate that reduces the millage but not entirely to revenue neutrality. Commissioners who feared locking in a recurring year‑over‑year increase preferred a single, full implementation with a cost‑of‑living adjustment component; others supported phasing the assessment to soften immediate cost impacts and better align with the timing of the state changes.

Legal and program limits emerged as a central constraint. Staff reminded the commission that ALS (Advanced Life Support) costs — such as paramedic incentives and certain medications — are not eligible to be funded by the assessment under Florida law, so about 10% of current fire‑related costs would remain in the general fund regardless of assessment implementation.

Commissioners asked for more public education on the difference between a fire assessment and traditional ad valorem taxes, and for clear accounting so taxpayers can see any millage reductions or offsets. The commission asked staff to prepare options for the July 28 special meeting, including millage scenarios tied to the assessment and draft language for the tentative maximum millage that will appear on TRIM notices.

What’s next: staff will return with detailed scenarios (phase vs. full implementation, and millage options) at a July 28 special meeting; commissioners indicated they want those options in hand before setting the tentative maximum millage.