Islamorada Council members chose not to slap village property owners with a nearly 10% increase on their tax bills during a final budget hearing on Sept. 28 at the Founders Park Community Center. Instead, the council elected to set a millage rate that represents a roughly 7% hike from the previous year.
Citing increases residents are facing on trash disposal, water and wastewater, councilwoman Deb Gillis suggested lowering the property tax rate from the proposed 2.7231, or $272 per $100,000 of the property’s assessed value. Gillis recommended the council go with a similar tax rate from last year of 2.6500, or $265 per $100,000 of a property’s assessed value. The council agreed.
Councilman Steve Friedman said he wished the discussions surrounding a decrease in the millage rate happened sooner and not 36 hours before the new fiscal year. Council members weren’t presented with a revised budget reflecting the 2.65 mills until later in the meeting.
Despite establishing the same tax rate from the 2025-26 fiscal year, the village will collect more property tax revenue due to the $491 million increase of taxable real estate in the village for the new fiscal year that begins Oct. 1. Revenue the village will get through property taxes is around $19.5 million, which is up from the $18.2 million collected the year before. The funds support the day-to-day operations of the village, from public safety and parks and recreation to building services, planning and development, finance, IT and code compliance.
Village Manager Ron Saunders noted before the discussion that the village’s spending plan includes pay increases of 6% for firefighters as a part of a collective bargaining agreement. Police services are also increasing to account for pay bumps for deputies.
“Just those two areas count for about half the property tax increase we’re going to see this year,” he said.
Day-to-day expenses for village operations totals $23.9 million, with public safety costs accounting for about $13.5 million.
Village employees will receive a 3% cost-of-living adjustment while having the ability to receive up to a 3% merit increase based on performance, as part of the village’s approved spending plan for the coming fiscal year. Last year’s budget saw no increases for staff.
Vice Mayor Sharon Mahoney said she had a problem with the merit increase. She said the village council would essentially be giving employees a 6% raise when adding in the COLA. She preferred to see a bonus that could be given out on a yearly basis.
“We have a great staff. I think they are compensated very well,” she said. “This is about the taxes for the community.”
Saunders, who was tasked with asking staff about the bonus versus a merit raise, said there was pushback from staff on the idea. Council members previously approved a tentative budget that included a 3% COLA adjustment and 3% merit raise.
Gillis noted that many staff members aren’t receiving the money they should be making when compared to how other municipalities pay their employees. Mayor Don Horton was surprised to learn that no increases for exceptional performance were given out going back the past seven years.
“I think that a merit increase is based on a set of guidelines and a way to actually score how an employee is doing,” he said. “And if they’re just answering the phones and coming to work on time, it doesn’t evolve into a merit increase.”
The COLA and merit raises represent an increase of $282,641.
By reducing the millage rate, the council proceeded to approve an adjusted spending plan for the coming fiscal year, which reflects less property tax revenue, cuts to overtime in fire rescue, more revenue through a franchise fee Island Disposal pays to the village, more revenue from the marina at Founders Park and a decrease in funds for the parks and recreation department for special events.
