Council Holds Tax Rate Steady but Warns of Future Needs

During its July 20 budget workshop, the Marco Island City Council gave informal direction to continue preparing a proposed $34.3 million general fund budget using the City’s current property tax rate, even as officials warned that additional revenue may be needed to address future infrastructure costs.

City Manager Casey Lucius said staff proposed balancing the budget by cutting expenses in every department, postponing a $1.5 million bike lane project and reallocating existing capital funds to street resurfacing, storm pipe repairs and the Caxambas Bridge replacement.

The proposed property tax rate is 1.2670 mills, the same rate approved last year. Rising property values are expected to increase property tax revenue from approximately $23.3 million in fiscal year 2026 to $23.5 million in fiscal year 2027. That revenue would account for about two-thirds of the proposed general fund budget. The remaining revenue would come from state-shared taxes, fees, service charges, interest income and other City sources.

Council members discussed a possible increase of 0.02 mills, which would raise approximately $371,000 and provide enough revenue for the City to increase spending to the limit permitted under its Charter spending cap.

Vice Chairman Rene Champagne said the increase was “nothing to be concerned by,” but Council members generally directed staff to continue preparing the budget using the current millage rate.

Councilor Tamara Goehler opposed raising the millage this year while residents are also being asked to consider an infrastructure bond. Lucius later expressed the same position, saying she did not believe it would be a good year to do both.

Although the proposed budget remains below the spending cap, several council members said the City may need additional revenue in coming years to maintain roads, bridges, drainage systems and other infrastructure.

If the bond passes, the City would have to raise the millage rate to repay the debt. If it fails, Lucius said she will return with strategies for funding infrastructure in fiscal year 2028 and beyond. Those options could include identifying new revenue, seeking another bond or loan, or asking voters to amend the spending cap.

“We have a one-year plan right now,” Lucius said. “But we do need to start thinking long-term about our infrastructure, and that will take both revenue and spending cap discussions.”

An updated calculation showed the proposed budget is approximately $311,000 below the spending cap. Champagne argued that inflation would consume much of the increase allowed under the cap, leaving the City with little additional purchasing power.

“So whatever benefit we get by the 3% plus 2.8% gets eaten up almost immediately,” Champagne said. “So in effect, we’re staying flat.”

The City’s fiscal year 2027 spending cap calculation does permit general fund operating expenditures to increase by 3% plus a 2.8% cost-of-living adjustment.

Council members also spent considerable time discussing police and fire pension costs.

For every $100 paid in police wages, the City is budgeting approximately another $40 for the police pension. For every $100 paid in firefighter wages, it contributes an additional $26.17. By comparison, the City contributes about $6 for every $100 paid to general employees.

Lucius said the police pension contribution alone is larger than the budgets for information technology, legal services, the executive department, general government and growth management.

Council members acknowledged that the benefits had been negotiated through employee contracts, and Champagne said future councils should examine the long-term financial effects more closely. “They’re done deals. We have to do what we have to do…But going forward, the new City Council or even future City Councils need to get into this a lot more than what we did.”

At the end of the workshop, Lucius summarized that Council members generally supported the capital funding strategy, the departmental operating budgets and continued preparation of a millage-neutral budget, with additional work needed on the legal services budget.

No formal votes were taken during the workshop. The Council will make its final decisions during budget hearings later this year.