The Indian River Board of County Commissioners has been notable for its fiscal restraint and responsibility for decades now, and this year continues that trend.

Looking ahead to the loss of substantial revenue that will result if voters approve a property tax reduction amendment in November, County Administrator John Titkanich just released a proposed budget for the upcoming year that is $97 million less than this year’s budget.

Titkanich and County Budget Director Kristin Daniels outlined some details of the proposed $614,789,330 budget, which is still in flux.

The original proposed budget adopted last October was $598,860,844, but that number had ballooned by the end of March to more than $711 million.

Most of that increase was due to greater costs for capital projects, such as large road construction and maintenance projects, and other increases related to inflation in the costs of materials and fuel, Titkanich said.

Also, the county recently assumed the cost of inmate medical care, about $3 million per year, as part of a settlement with the sheriff's office, which sued the county over a budgetary dispute.

Despite those rising expenses, county leaders found a way to trim nearly $100 million from the March budget estimate, looking ahead to the outcome of the property-tax reduction referendum this fall.

“Sometimes we have to make budget adjustments,” Titkanich said.

Voters in November will say yay or nay to Florida Constitutional Amendment 3, which would increase homestead exemptions on non-school property taxes from $50,000 to $150,000 in 2027 and $250,000 in 2028. The amendment also reduces the cap on annual property assessment increases on non-homestead property from 10 percent to 5 percent.

At least 60 percent of voters must approve the measure for it to pass.

If it does pass, the county will lose approximately $22 million in property tax revenues in the 2027-2028 fiscal year, along with another $41 million in 2028-2029, Titkanich said.

“Make no mistake – this is a tax shift,” he said. “This will shift the tax burden from homestead property owners to non-homesteaded property owners and the owners of nonresidential properties.”

The tax burden shouldered by commercial and non-homestead residential property owners will be relatively higher if Amendment 3 is approved. If in the future the county opts to raise the property tax rate, also called the millage rate, that would further increase the burden on those taxpayers.

“Those who own vacation homes and rental properties are not eligible for exemptions, which means landlords will likely increase rental costs,” said Titkanich.

Property taxes are the primary source of revenue for the county’s general fund. Sixty percent of that fund goes to pay the costs of the constitutional offices – the sheriff’s office, clerk of the court and comptroller’s office, the property appraiser’s office, the tax collector’s office and the office of the supervisor of elections.

About 21 percent of the general fund pays for county operations, with the rest going to state agencies, children’s services, nonprofit agencies and economic development.

Even though the county took in an additional $7.27 million in property taxes this year – an increase of about 6.8 percent over last year – most of that money will be absorbed by a nearly $8 million increase in state-mandated funding for constitutional offices, Titkanich said.

If property tax revenue drops, the county will need to take a close look at all departments to find cost savings.

“We will have to look at everything, with input from county commissioners and the public,” Titkanich said. “We may see a reduction of as many as 85 employees. We may see some emergency services stations consolidated. But it’s too early to ascertain exactly what types and levels of services would exist after a yes vote on Amendment 3.”

A Tax Reform Advisory Committee is being formed to evaluate possible changes to the budget should the measure be approved. The committee will include top county executives, the county attorney, Daniels and others in the Office of Management and Budget, and representatives from the human resources division, Titkanich said.

One area where the county could increase revenues would be to initiate stormwater utility fees, something that was recommended when the county drafted its Stormwater Management Plan last year.

“Managing stormwater, ensuring flood control and protecting the lagoon score high on our residents’ list of priorities,” Titkanich said. “So yes, we will evaluate what a stormwater fee would look like for the county.”

The City of Vero Beach established stormwater utilities assessments and fees in 2021 and many counties, including Brevard, have them, as well. Other municipalities have assessments for law enforcement and fire and emergency services, as well, he said.

Titkanich said the last thing he wants to do is raise property tax rates, which have remained the same for six years and are among the lowest of any county in Florida.

“The county continues to build upon a foundation that has been built over the years through the efforts of former commissions and the Office of Management and Budget to maintain a fiscally sound approach and process for developing the budget,” Titkanich said.

Public budget hearings will be held on Sept. 9 and Sept. 16 at 5 p.m. at commission chambers before next year’s budget is finalized.

The proposed budget can be reviewed on the county’s website.