What began as nearly a 19% hike for Marathon residents on their next tax bills dwindled to 5.52% at the end of the city council’s final budget hearing on Sept. 22. But a largely unchanged spending plan will require a $2.6 million dip into the city’s reserves to make up the shortfall.
Following two hours of debate and multiple proposed rates, the council voted 4-1, with councilman Lynn Landry as the lone dissenter, to adopt a millage rate of 2.0631 for fiscal year 2026-27, identical to Marathon’s current rate of $206.31 per $100,000 of taxable home value.
With rising property values throughout the city, that rate equates to a 5.52% increase over the rollback rate of 1.9552 mills – defined as the tax rate required to raise the same dollar value as the previous year in ad valorem revenues.
The final rate was a significant reduction from the city’s originally proposed 2.3231 mills, an 18.82% increase over rollback that would have generated $12.2 million for the city. Finance Director Jennifer Johnson first presented the budget in a Sept. 16 hearing, telling the council the original spending plan would have equated to a $182 annual tax increase on an average $700,000 home in Marathon.
Increases in the budget include a 3.8% cost-of-living adjustment for staff, along with up to 2% of each department’s total salaries available to award merit raises, required increases for union employees, elevated utility and maintenance costs for Marathon’s parks and recreation department and a part-time employee for a public works and street maintenance manager, among other items.
Even with the significant jump, she said, Marathon would still draw $1.9 million from its reserves, leaving the city 21 days short of its 12-month target if the budget was fully spent.
At the first hearing, City Manager Steve Williams assured the council the city would “absolutely be as conservative as we can with our spending” in the coming year, acknowledging the uncertainty of a November vote that could slash property tax revenue across the state.
He said the proposed spending plan was heavily influenced by three consecutive years of meeting rollback, and that the coming budget cycle could represent the city’s final chance to make significant adjustments if the amendment were to pass. Beyond a cut to taxable values of homesteaded properties, a special state legislative session could put strict guardrails on how revenue can be used by local governments.
Marathon was one of only three municipalities in Florida to accomplish the three-year rollback feat, Williams said, and by far the largest to do so.
“We’re lucky with past and current city council leadership that we’re not in dire straits, but let’s not put ourselves there a year early,” he said last week. “You have no election this fall, you have no room full of protesters. … If you’re going to do (a raise), now would appear to be the correct time.”
Locals weigh in
Tuesday’s final hearing saw a few more dissenting voices as residents urged the council to curtail the proposed increase.
Greater Marathon Chamber of Commerce CEO Daniel Samess told the council that locals already face nearly a 16% increase on their monthly water bills with previously-scheduled sewer and water assessments, and that Marathon’s proposed hike far outpaces increases of roughly 7.5% and 9% in Monroe County and Islamorada and a rollback rate in Key West.
Coco Plum resident Mike Millard said the council from 2022 to 2026 had increased its budget “basically by 100%.” As approved Tuesday night, the final spending plan totaled $201 million against $115 million in 2022-23.
“We’ve added staff and increased their salaries dramatically … whereas all of our competitive set from the county has reduced staff, and Key West is down 18 (employees),” added former councilman Jeff Smith. “In addition to those raises we talked about … 54% of your staff in one year got additional (one-time) adjustments.
“These are real numbers, and we need to look at the efficiencies of what we’re spending on each of these departments and what the workloads are.”
Who pays the bill?
Nearly two hours of debate among council members and staff centered on a tolerable four-way balance between tax increases for residents, cuts to city spending, identifying potential revenue sources and survivable dips into reserves.
Council members pointed to limited line items in which the city’s actual expenses were a far cry from their budgeted numbers over the past few years, while Johnson said staff had already identified $100,000 in additional EMS revenue and $135,000 in additional code enforcement revenue, along with a 20% increase in parking fees.
An increase of $440,000 to the city’s IT department also came under scrutiny, as did merit raises for staff, which council members cautioned should not be awarded as a blanket percentage.
“Everything in this building runs off of IT,” Williams said, pointing to Marathon’s growing dependence on technology for permitting, communications, public information and day-to-day operations. “That is the portion of society that is growing and expanding more so than probably anything else, and it will continue. … We are beyond antiquated with some of (our tech).”
HR Director Evie Engelmeyer said a revamped performance evaluation process should help department heads appropriately reward top performers while leaving some available funds unspent.
The council also informally agreed to a $125,949 increase in fire and EMS services charged to Key Colony Beach – a step toward bringing the sister city’s charges more in line with its costs to Marathon.
A unanimous vote to adopt the 18% increase quickly went out the window, and the panel could not reach the required 4-1 agreement on progressively lower tax rates – from 10% to 7.03% and 6% – until Johnson suggested the 5.5% raise as a final compromise.
Vice Mayor Debbie Struyf and councilman Kenny Matlock pushed for a lower tax increase, arguing that rising insurance premiums, housing costs and other expenses had already placed considerable pressure on Marathon residents.
Matlock acknowledged that upgrades throughout the city equate to rising maintenance costs, while Struyf listed “pretty things we think we need” as the first targets of city spending cuts.
Landry and Johnson repeatedly expressed concerns that deficit spending could not serve as a sustainable budget crutch, with Landry urging the council to close the deficit rather than solely prioritize a modest tax jump.
“We’re killing ourselves on the deficit. It’s going to come back to haunt us,” Landry said.
“I need (my taxes) as low as everyone else needs theirs low,” said Williams, cautioning that preserving low tax rates would likely lead to staffing cuts or cuts to services beyond the coming year. “But we can’t foot the bill and artificially go to numbers that, as Jen is telling you, aren’t sustainable. You’re going to get yourself in a heck of a position should we have a wind event next year.”
Struyf said she would favor across-the-board fee increases for city services over a tax hike, while Williams pointed out that other Florida cities with large portions of homesteaded properties could move toward a fee-based government funding model should a property tax amendment pass.
“We can’t do this (18%) to these people,” Struyf said. “I’ve lived in my house for 44 years, but it’s going to affect every new homeowner in this community, and it’s going to affect them hard.”
