Atlantic Beach residents won't see a property tax rate increase next year, but the city's proposed budget flags two converging fiscal threats that could drain up to $1.8 million annually from city coffers within two years.

The proposed $56.95 million fiscal year 2026-27 budget, presented by City Manager Kevin Hogencamp at the commission's third budget workshop on Aug. 19, keeps the millage rate at 2.7499 mills. For the median homesteaded property assessed at $582,320, that means an annual city tax bill of $1,100.45, or about $91.70 per month.

The budget itself is lean. It's down $666,034 (1.16%) from the current year, with the general fund dropping slightly to $21.82 million.

Amendment 3 and an Expiring Sales Tax Threaten Millions in Revenue

Staff identified a structural problem: the Better Jacksonville Plan sales tax is sunsetting, and Florida's Amendment 3 on the Nov. 3 ballot would raise the homestead exemption from $50,000 to $150,000 in 2027 and $250,000 in 2028, according to the Tallahassee Democrat. The amendment requires 60% voter approval.

City modeling shows the exemption expansion alone would cost Atlantic Beach approximately $1.06 million in fiscal 2027-28 and $1.84 million in fiscal 2028-29, representing up to 8.5% of the general fund.

Atlantic Beach is among 116 Florida municipalities that a state analysis found would be unable to cover public-safety costs under a full homestead exemption, even if all other spending were eliminated.

"When the bill comes due, it won't be paid by Tallahassee," state Sen. Lavon Bracy Davis said during the Legislature's June special session. "It will be paid by your city, your county, your neighborhood school."

The budget includes a tiered contingency plan: a 1% to 4% revenue contraction triggers hiring holds and travel freezes; a 5% to 9% drop means 32-hour flex schedules and rebid contracts; a loss of 10% or more would tap stabilization reserves and defer capital projects.

City Cuts Jobs Now to Brace for Future Shortfalls

To prepare, the city is already trimming. The budget eliminates three positions — human resources deputy director, wastewater plant operator and building maintenance — saving roughly $240,000 plus benefits. One new communications specialist position ($60,000) partially offsets those cuts for a net reduction of two full-time positions. Staff projects eliminating at least four more positions through attrition by fiscal 2028-29, saving an additional $450,000.

Wage growth is the lowest in a decade. The base minimum rises from $16.83 to $18 an hour, and employees earning under $121,680 receive a flat $2,433.60 annual raise. Those above that threshold are capped at 2%.

Grant Funding Keeps Capital Projects on Track

Despite the belt-tightening, more than $5.5 million in grant-funded capital work is planned: $1.4 million for lift station vulnerability retrofits, $1.08 million for beach walkovers at First, Fourth, Fifth, 11th, 13th and 15th Streets, $1 million for Aquatic Gardens drainage and ditch widening, and $650,000 for the Stanley Road storm sewer system.

A renegotiated Fire/Rescue contract cut the city's contribution from $1.5 million to $750,000, with the savings directed to capital reserves.

Public Hearings Set for September

Mayor Curtis Ford, Mayor Pro Tem Bruce Bole, Commissioner Candace Kelly and Commissioner Jessica Ring attended the workshop. Commissioner Thomas Grant was absent. No public comment was received.

The commission's next budget discussion is Aug. 24. The first formal public hearing is Sept. 14, and the final hearing with tax rate adoption is Sept. 28 at City Hall, 800 Seminole Road.