In the coming weeks, the city of Lakeland will put the finishing touches on its budget for the 2024 fiscal year, which begins Oct. 1. There are still two public hearings before commissioners cast a final vote, but the $164.23 million spending plan is unlikely to change much.
The most important news for Lakeland homeowners is that the city does not plan to raise its property tax rate.
Priorities in the upcoming budget include boosting pay for all city workers, building more affordable housing, adding an eighth fire station in north Lakeland, helping Florida Southern College expand the Polk Museum of Art and adapting to the increasing cost of materials for resurfacing roads.
Holding the line on property taxes
At the city’s annual budget retreat on Friday, City Finance Director Mike Brossart recommended holding the millage rate at $5.4323 for every $1,000 of assessed value. That means a home with a taxable value of $200,000 after exemptions would owe $1,086 in taxes to the city.
Individual bills may go up because of rising property values, but the millage rate would remain fixed. New buyers, people with second homes and commercial properties might see bigger increases, but for homeowners with homestead exemptions, increases are capped at a maximum of 3% annually, thanks to the Save Our Homes amendment approved by Florida voters in 1992.
Property taxes are the single largest source of money for the city’s general fund, accounting for 22% of the budget. Despite not raising its rate, Lakeland expects to collect about $6.3 million more in property taxes next year — $1.4 million from new construction and $4.9 million from increased value of existing units.
The gross taxable value of all property within Lakeland is projected to hit $10.68 billion in fiscal 2024 — a 12.15% increase over the current year. The double-digit growth follows a 15.25% increase in fiscal 2023.
Although the real estate market and pace of development have cooled, the tax base growth reflects the completion of projects that were started several years ago. Brossart said he is conservatively forecasting a slowdown with 5% increases of in fiscal 2025 and 2026.
Lakeland’s property tax rate is comparatively low, relative to other municipalities in the region. Highland Park has the highest millage rate at 9.9759, while Davenport’s is 7.5 and Winter Haven’s is 6.59.
Brossart outlined an option for rolling back Lakeland’s millage rate to 5.0030, but recommended against it. City Commissioners agreed and voted to keep the current millage.
The city’s ad valorum assessment is not the only component of local property tax bills. Lakeland homeowners are also taxed by the Polk County Commission, Polk County School Board, Southwest Florida Water Management District and Lakeland Mass Transit.
Polk County commissioners directed the county manager to budget for the coming year assuming a 3% cut in the county’s millage rate from 7.7386 to 7.5064.
Pay raises for city workers
During the workshop, City Manager Shawn Sherrouse shared the results of a city employee compensation study by Bolton Consulting. Based on the report, he proposed that the city’s 3,000 employees receive a 3% across-the-board bump in pay so the city can attract and keep workers and be more competitive in a hot job market.
“We must fix our pay system for our general employees — and not just the job pay ranges, but actually increase pay for job classifications,” Sherrouse told city commissioners.
“We must fix our pay system for our general employees.”
shawn sherrouse, city manager
Sherrouse recommended an additional 3% merit increase for general employees who are currently paid below their job’s pay-range midpoint. For employees who are at or above the midpoint, he proposed a 2.5% raise, which is the city’s traditional merit increase, stopping at their pay range’s maximum.
Finally, Sherrouse recommended an adjustment for specific employees whose job classifications the pay study determined are not “market-competitive.”
The consulting agency concluded that Lakeland employees are generally underpaid based on surveys of 18 other government agencies’ pay for 30,000 employees in more than 600 jobs. Governments in the study included Sarasota, Kissimmee, Fort Myers and Pasco County.
The proposed pay raises will be offset somewhat by increased health insurance costs. The city plans to raise insurance premiums by 7.5% due to the rising costs of healthcare and medicines, plus costs incurred during the COVID pandemic.
But to help employees, the city is proposing adding two new tiers to its health plans so there are four options based on family size. It would also cover medications, with no out-of-pocket costs, for such common conditions as diabetes management, allergies, hypoglycemia and asthma — and lower annual deductibles and out-of-pocket maximums.
Art museum, affordable housing and roads
City Commisioners have also requested four other items be placed in the budget.
There is a request to contribute $250,000 for two years to the Florida Southern College Polk Museum of Art expansion. In February 2022, the museum announced a $6 million, 10,000-square-foot expansion that will triple the gallery space and add classrooms and art labs. Construction has already begun. The expansion will allow the museum to show more of its collection of 2,800 works.
They have also asked to set aside $1 million for affordable housing. Rents have skyrocketed in recent years, although salaries, for the most part, have remained stagnant and there is a dire need for apartments the average worker can afford.
A low-income housing complex on East Bella Vista Street, being built by private developers just south of Tigertown is nearing completion and several other apartment complexes with affordable units are sprouting up in various locations, including the Westgate neighborhood, and along Griffin Road between Lakeland Hills Boulevard and U.S. 98 North.
The money will help developers offset costs.
Commissioner Bill Read, though, balked at setting aside $1 million for affordable housing, saying the money should be used to build a new fire station on the north side of town.
“I would be more interested in having a fire station,” Read said.
Mayor Bill Mutz said that would be funded in a different way.
Brossart said the city has budgeted to borrow nearly $4 million for the fire station, which includes $3.7 million for construction and the rest for furnishings.
“I would suggest that number is low,” Brossart added.
The $1 million is proposed to be set aside to invest in property, like five derelict properties on North Vermont Avenue between Parker Street and Memorial Boulevard, which were bought or taken in 2018. A run-down motel was donated to Talbot House Ministries, which remodeled the building and now provides affordable-housing to low- and very-low-income working adults, veterans, and the disabled.
There is also a request for $1 million in recurring transportation funds for road maintenance.
“Impact fees and the like go toward creating new capacity — but we are slipping behind and could use some funding that would go toward maintenance (of existing roads),” Sherrouse said.
Mutz nodded. “When you go to a city that doesn’t do this well, it is so demonstrative so quickly and it makes an impression about the whole entire city.”
City officials said resealing a road extends its life for three to seven years.
A public budget hearing is scheduled for Sept. 7 and the commissioners will vote on the final budget on Sept. 21. Both meetings will be at 6 p.m. on the City Commission chambers.
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