Oviedo throws water on fire fee as tax cuts threaten to torch budget

In reaction to moves by the Florida Legislature eyeing property tax cuts, and remarks by Gov. Ron DeSantis advocating for eliminating property taxes in the state, Oviedo lawmakers Tuesday held a session bracing for the impact. The result: Nothing will change, for now. 

Moments after reporting that the city is in a “really good financial position,” Oviedo Finance Director Jerry Boop said that the city needs to find other ways to keep its future budgets afloat to improve its chances of weathering sudden changes to the city’s income. 

“We’ve talked over the years about diversifying our revenue streams so we’re not so reliant on the millage rate, so to speak,” Boop said. The city’s millage rate is the city’s share of the larger total property tax levied to property owners in Seminole County annually. Oviedo’s millage rate for the 2024-25 fiscal year, which ends in September, is 5.9540, or a tax of $5.95 per $1,000 in a property’s taxable value. So a home with an assessed value of $300,000 would pay Oviedo $1,786.20 in tax per year as the city’s portion of the overall property tax bill, which also can include additional charges and school district costs. 

The proposed referendum for the 2026 statewide election that could eliminate property taxes in Florida comes in the wake of an investigation during this spring’s legislative session by state lawmakers into why an unreleased 2022 report by the Florida Office of Insurance Regulation appeared to show that property insurance companies in Florida were secretly moving profits to affiliated companies out of state while claiming to be losing money in Florida. That claimed deficit had caused the state to allow insurers to continually raise property insurance rates in Florida, where homes, at more than $10,000 per year, on average, are the most expensive to insure in the country. 

But the proposal by lawmakers to ease homeowners’ burden by eliminating property taxes, rather than reducing insurance costs, has cities scrambling to plan for future financial issues. 

“Year-over-year the state proposes something to decrease revenues,” Boop said. “The revenue impact this year is $40,000. Going forward, that number is just going to increase. And the concern is that that is one avenue that the state is taking with this; if they add additional avenues, or property tax reductions, then we need to consider some alternative revenue source, or we need to cut services.” 

The city is set to collect nearly $24 million in ad valorem revenues, or revenues based on the assessed values of properties in the city, with various tax exemptions taken into account, this fiscal year. In recent years the city has made cuts to city events and festivals to make ends meet. 

To attempt to head off financial issues, City Manager Bryan Cobb suggested revisiting setting a fire district fee, which would raise money for the city’s fire department as a fee, rather than building it into the city’s millage rate. 

“We just got concerned with knowing all the things that are going on in Tallahassee and knowing that next year there’s probably going to be more,” Cobb said. 

The last time the city looked into establishing a fire district fee, the city was in much worse financial shape, Boop said. 

“The last time we performed this exercise we were totally upside down and years behind in our capital spending,” he said. “We’re in a much better financial position than we’ve ever been in since I’ve been here. This is a good time to take a look at what Mr. Cobb is proposing in a relaxed environment, where we don’t have to rush through it, be in a panic to get something done because it’s absolutely necessary.” 

In 2022 the city established the fire fee district to try to shore up the city’s funding of the department.  

“The last time we collected enough in property taxes to cover our first responders was 2008,” Mayor Megan Sladek said during a February 2022 meeting. “Since then, we have not done it again.”

In June of 2022 the City Council abruptly reversed course and voted not to establish a fee for the fire district, effectively nullifying the revenue stream. The city has continued to fund the fire department largely through property taxes. 

The fee could potentially help the city reduce its millage rate. 

“It establishes a dedicated funding source,” Boop said. “That’s what it does. What this would do is take it out of the general fund, it would make it into a special revenue fund…and then the fees that are collected would then go into that special revenue fund and it would be used to pay for fire suppression costs and they would not be included in the general revenue fund.” 

He added, “Then we could possibly reduce the millage rate by a certain amount…because we would no longer be funding that operation by the millage.”

After 20 minutes of discussion, the Council declined to request city staff look into the fee, which Cobb said could take 6-8 months of research. But that doesn’t mean it won’t be revisited in the next budget cycle, Councilman Keith Britton said. 

“We ought to at least look over the horizon a little bit,” Britton said. “To be prepared for something that might occur.” 

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