Lakeland Commissioners Wrestle With How Much to Raise Property Taxes (2024)

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Lakeland’s property tax rate is likely to increase next year — but by less than city staff recommended. City commissioners spent four hours on Monday scrutinizing the city’s budget and looking for things they could cut to keep any increase very small.

What it is now: For the past six years, Lakeland has charged property owners a “millage” rate of 5.4323. A mill is one-thousandth of a dollar, so the current tax is roughly $5.43 per $1,000 of appraised property value.

Two scenarios: The commission agreed last month to advertise a millage rate of up to 6.0529. Raising it to that level would cost the average Lakeland homeowner about $95 more per year, but the commissioners were very reluctant to go that high. After a lengthy discussion, they asked Finance Director Mike Brossart to prepare two budget scenarios for consideration:

• 5.5644 mills, which would cost the average homeowner $20.08 more annually. It is the rate Lakeland charged from 2016 to 2018.
• 5.62 mills, which would cost the average homeowner $28.53 more annually. It would be the highest millage the city has ever imposed, but would still put Lakeland below 13 other Polk County municipalities.

Average tax bill: Currently,the average taxable value of a home in Lakeland is about $152,000.That’s after homestead exemptions and exemptions for elderly residents and veterans. Residents pay an average of $825.71 per year.

An increase to 5.5644 mills would raise the average tax bill by about $20.

“That’s four coffees, five coffees at a nice coffee place,” said Mayor Bill Mutz. “I’m not trying to be dismissive of that … It’s a responsible step for us to take, with all the other pressures in place and the realities … This is what we ought to be doing. This is leadership and it’s manageable, it’s absorbable.”

Rising costs: Commissioners and senior staff acknowledged that the city faces similar economic pressures as homeowners, with skyrocketing property and health insurance rates, salary increases to keep pace with the increased cost of living, and the need to add more police and fire personnel as the city’s population grows at a record rate.

Cash-on-hand needs: There was a lengthy discussion about available cash on hand to maintain the city’s excellent credit rating agency scores and the need to have funds available if the community is impacted by a natural disaster like a hurricane.

Currently, the city has enough funds on hand to run the city for 118 days, with $52.64 million in the bank after expenses. Last year, the city ended the fiscal year with enough cash on hand to operate for 134 days — $55.06 million. The city commission voted several years ago to keep a minimum of 45 to 60 days cash on hand to maintain the city’s excellent credit rating three years out.

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But Commissioner Sara Roberts McCarley argued that 75 days of cash on hand ought to be enough, and the additional funds could be used for other city needs.

“I know we can’t judge a book by its cover, and we can’t game it out,” McCarley said. “One hundred fourteen and 134 (days) is a lot of money. So that’s a lot of money that I think that, when I look at infrastructure and being able to pay for things, I would want to utilize that in those different areas.”

Predicting property taxes: Part of the formula is trying to predict the increase in property values, which have gone up dramatically in the last five years:

• 2019 — 8.57% increase
• 2020 — 6.65% increase
• 2021 — 7.55% increase
• 2022 — 11.03% increase
• 2023 — 15.25% increase
• 2024 — 12.07% increase

City Finance Director Mike Brossart is using a 5.48% increase in property values for fiscal year 2025, which begins Oct. 1. Property Appraiser Marsha Faux provided the 5.48% figure to the city of Lakeland.

“When we were projecting in 2020 and 2021, we didn’t know what COVID was going to do to us, right?” Brossart told the commissioners, showing the values went up far more than he had predicted. “Those are those great swings and projections because those are the things that we just can’t predict.”

Keep rates the same: Commissioner Mike Musick advocated for keeping the current millage rate unchanged.

“If we increase the millage and the property taxes raise, rise up, I look at the constituents and say, ‘Sorry, I got it wrong. I took your money, and I didn’t need to,’” Musick said. “We do not know. We have an election coming up … this is a very volatile time. But we are making that one assumption, that it’s either going to stay stagnant or go down, and we’re basing our decision on that.”

The city’s budget includes:

• A starting surplus of $54.25 million.
• Budgeted revenue of $153.801 million.
• Budgeted expenses of $165.554 million.

Under the proposed budget, the city would spend more than it collects, and it would have to dip into the surplus to cover the difference. That is what is driving the discussion.

Additional expenses: Since fiscal year 2023, the city’s recurring general fund expenses have grown by $8.774 million annually, mostly in public safety. Lakeland has been able to cover that without raising property taxes because home values increased. These charges include Lakeland Police body-worn cameras, 25 additional police officers, 24 additional firefighters and more than $1 million in transportation road maintenance. Fire Station 8 is in the works and next year’s budget will also include an additional 12 firefighters to staff the new station.

The proposed 2025 budget also includes five additional police officers, as does the 2026 budget.

“I love public safety, but I also love public works and wastewater and water and things that people don’t want to talk about that (cost) a great deal of money,” McCarley said. “I know we have beautiful parks and activities, but when we’re all tightening budgets, like, you know, family movie night, going out to the theater, is the first thing that gets cut and buying the $10 popcorn.”

One major cut: One thing the commissioners agreed to cut out of the budget was $1 million for affordable housing. That money typically has been leveraged as matching funds so organizations, builders and homebuyers can qualify for other grants.

The commission gave tentative approval to use some of that $1 million elsewhere:

• Police Athletic League — $100,000 to assist with new building plans.
• A proposed senior center — $100,000 for a matching grant.
• And the Mayor’s Council on the Arts — an additional $100,000 for a total of $375,000.

The city would also give an already-promised $250,000 grant to the newly renamed Ashley Gibson Barnett Museum of Art at Florida Southern College for its major expansion, currently underway.

Low tax rate: Brossart pointed out that Lakeland continues to have one of the lowest millage rates in Polk County.

What’s next: The City Commission will have two more budget hearings before it votes on the budget. Both are open to the public and have time allotted for public comment. They are scheduled for Sept. 5 and Sept. 19, both at 6 p.m. in the City Commission chambers:

Watch the budget workshop