The Marathon City Council began its 2026-27 budget process by approving a preliminary 18.8% property tax increase on July 21 – but stressed that the figure represents a ceiling to be lowered in the coming months, not the final rate residents will pay.
The proposed millage rate of 2.3231 mills – or $232.31 per $100,000 of taxable home value – would generate about $12.2 million for the city’s general fund, which is projected to collect roughly $24 million in total revenue against $26 million in expenditures.
Finance Director Jennifer Johnson said the proposal includes a 10% increase in employee health insurance spending and cost-of-living and merit raises; higher fire department personnel costs; increased professional services and equipment maintenance for the city’s IT department as well as absorption of the city’s public information officer position; maintenance, utilities, small tool and special event costs for parks and recreation; and a part time employee for the city’s public works and street maintenance.
Johnson told council members that city department heads had already identified $244,000 in cuts during individual meetings, and that approving the proposed plan would leave the city with about $24.4 million in reserves – just over 11 months’ worth of operating expenses, based on the proposed new budget.
Maintaining the city’s 2025-26 tax rate of 2.0631 mills – still a 5.52% increase in revenues collected due to rising property values – would require about $1.37 million in cuts, Johnson said. Attempting to reach the rollback rate and raise the same total dollar amount in ad valorem revenues as the previous year would require even more aggressive reductions.
Councilman Kenny Matlock said he’d aim to take a closer look at cost-cutting measures before the budget is finalized, but acknowledged “you can do (cuts) to the point you damage the public, their services or how our town looks.”
“I kind of want to put staff up to the challenge and say we’ve got to slash the $1.3 million out of this,” he said.
Interim City Manager Steve Williams cautioned against making cuts too aggressively, pointing to hefty factors next year if the state approves a proposed property tax reduction plan. While Marathon, with a large proportion of second homes and vacation rentals, may not feel the sting of reduced property taxes as much as other Florida cities, the property tax amendment would cap annual increases for both homesteaded and non-homesteaded properties, and would require an annual 10% budget reduction exercise. Whether the results of that exercise would be binding on future councils is still undetermined.
“We can go on an extreme diet this year, but then if you’ve got a 10% mandate next year … you’re going to have a really bad week trying to get 10% of what Jen already does a good job with,” Williams said.
Councilman Lynn Landry added that if the homestead exemption passes, assessed property values may only rise 5% per year even for non-homesteaded and commercial properties.
“This is the year we need to really correct our budget where we need to be,” he said.
Several council members stressed that adopting the preliminary rate does not lock in the final tax levy, which would require a unanimous final approval for such a significant one-year hike. Under Florida law, the preliminary rate establishes the maximum that can appear on Truth in Millage (TRIM) notices mailed to property owners. The council may lower the rate during public hearings later this summer, but cannot increase it.
Last year, the council approved a preliminary millage rate in July of 2.2235 mills before settling on the final rollback rate of 2.0631 mills.
The council approved the preliminary millage rate in a 4-1 vote, with Vice Mayor Debbie Struyf saying she would have preferred to begin reductions in Tuesday’s session.
The council pledged to review the budget over the coming weeks in search of additional reductions before adopting a final budget in September. Budget hearings are set for Sept. 16 and 22, both at 5:30 p.m. at Marathon City Hall.
