Palm Beach Town Manager Kirk Blouin is proposing a $134.4 million operating budget for 2026-27 – an increase of nearly $7.1 million, or 5.6 percent, over this year.
Mayor Danielle Moore and the Town Council are scheduled to take up the 371-page spending plan, which calls for a reduced property tax rate, at a workshop on Thursday, July 16, beginning at 9:30 a.m. in Town Hall.
Final approval of the budget and tax rate will occur at two public hearings before the council on September 8 and September 17 at 5 p.m. in Town Hall.
The new budget takes effect on October 1.
Blouin told the Civic Association that the budget proposal is the result of a very thorough review of town expenses during the last five months.
The staff’s goal was to present a budget that meets the high expectations of the community while adhering to lean government principles and without increasing the property taxes of homestead owners, Blouin said.
“We have been able to achieve that goal,” he said. “I am happy with the budget that we are going to present to the council.”
Blouin’s proposal calls for adding four new jobs in the Public Works and Building departments, increasing the town workforce to the equivalent of 403 full-time employees.
The new jobs include a landscape foreman, two landscapers and a building plan reviewer to meet additional, unfunded permitting requirements imposed by the Florida Legislature. The landscape jobs will enable the town to reduce contractual labor costs, creating a savings overall, according to Bob Miracle, Palm Beach’s deputy town manager for finance.
A $2.7 million increase in employee pay is proposed to cover merit and step pay increases, a 2.9 percent lump sum cost-of-living pay adjustment, and an increase in pay ranges for general and public safety employees to remain competitive in the regional job market. Of the pay increase, $1.1 million is for special assignment overtime for police who work off-schedule special detail for town businesses and special events. This is offset by the revenue paid by the local business/customer to the town, Miracle said.
The $2.7 million, which includes the four new employee positions, would raise the total cost of employee pay to $41.3 million.
Other big-ticket expenditures include:
- An increase of nearly $1 million, or 7.8 percent, for non-pension employee benefits. The lion’s share of this increase is for health insurance premiums. The total expenditure for this category would reach $13.2 million.
- A jump of nearly $1.7 million, or 9 percent, in contractual costs, which would reach nearly $20.2 million. This category includes legal advice and litigation, public safety equipment, bank service charges and increased utility expenses
- An additional $1 million would be devoted to capital outlay, bringing the total to $1.7 million.
Other major expenses include pension benefits, up nearly 3 percent to $16.6 million, and a $14.2 million transfer to the Capital Improvement Fund for drainage work, street paving, sanitary system improvements, and Phase 7 South paving following the conversion to underground utilities.
Nearly $6 million will be devoted to debt service. A $7.7 million transfer into the Coastal Management Fund will help pay for the upcoming $20 million-plus construction of a new Midtown Beach seawall. A $5.4 million voluntary annual transfer into the Retirement Fund will help pay down a long-term unfunded liability in that program.
Police, Fire-Rescue and Public Works are the three largest of the town’s nine departments and account for 57.5 percent of the budget. General Fund transfers into other funds, including the capital and coastal funds, account for 26.4 percent of the General Fund budget. All remaining General Fund expenditures account for the remaining 16.1 percent of the budget, according to the town.
The Town Marina will generate a $10 million surplus during this fiscal year. Of that, $8 million will help pay for utility undergrounding. Phase 4 South, Phase 5 North, Phase 5 South, Phase 6 North and South, and Phase 7 North were constructed during this budget year. The program is supposed to reach completion by the end of fiscal year 2026-27, when Phase 7 South and Phase 8 are built.
Property tax rate cut
The budget calls for lowering the town’s property tax rate from the current $2.61 per $1,000 of taxable value down to $2.53 per $1,000.
Under the lowered rate, property tax revenue paid to the town would increase by $5.1 million, to $90.8 million, because of a 9 percent average growth in taxable property values on the island, according to a preliminary estimate from Palm Beach County Property Appraiser Dorothy Jacks’ office.
Under the lowered rate, homestead property owners, whose annual increases in taxable values are capped at 3 percent, would pay the same amount in property taxes to the town, per $1 million of taxable value, as last year.
Non-homestead owners would pay an increase of $155 more per $1 million value, based on the 10 percent cap on annual increases in their taxable values.
About 40 percent of Palm Beach property owners have the homestead exemption.
Roughly 17 cents of every property tax dollar paid by owners on the island goes to the town. The remainder is collected by Palm Beach County, the county schools, and other tax authorities.
Total property taxes paid in the town during fiscal 2026 were $14,871 per $1 million of value, according to the town. Of that, $2,611 stayed in Palm Beach, and the rest went to other taxing districts.
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