Naples advances $294M budget with tax increase

City residents may see their property taxes rise slightly next year to cover union employees’ rising salaries, increased public safety needs and economic factors. 

Naples City Council tentatively approved a $294.1 million budget at its first budget hearing Sept. 8, up $53.1 million from this fiscal year’s $241 million budget. The fiscal year begins Oct. 1. 

Council had discussed increased public safety needs at a budget workshop in June and agreed to increase the 1.23 millage rate to 1.29 mills to generate $2.23 million more in operating revenue. The rise was partly due to uncertainty over Amendment 3, the homestead and property tax measure voters will decide in November, which could drastically reduce funds governments rely on. To prevent reductions in core local services, the amendment would restrict property-tax revenue to specified uses, including public safety, infrastructure, natural resources, debt service, employee retirement obligations and government operations. 

“We’re embarking on a year that sees the end of the last year of all of our union contracts,” City Manager Gary Young told Council. “We have headwinds from the potential declines in property taxes in the upcoming vote, but we do have stable revenues, stable reserves and we were able to have a continued discussion on continued public safety and enhancements.” 

The millage rate is the amount of property tax charged per $1,000 of taxable property value. A homeowner with $1 million in taxable property value would see city property taxes rise $60 to $1,290, while a resident with $5 million in taxable property value would see a $300 increase and pay $6,450. Roughly 14 cents of every dollar goes to the city, while 47 cents goes to the school district, 36 cents to the county and 4 cents to water management and mosquito control. 

During a budget presentation, City Finance Director Stefan Massol said the increased millage rate covers the final year of the city’s three-year collective bargaining agreements and increased police and fire personnel. He said it also will enable the city to keep pace with the costs of goods and services required to operate at its current service levels, maintain sufficient fund balance reserves to accommodate future economic conditions and maintain its stormwater improvements. 

No residents or businesses spoke during the public hearing. 

The aggregate rollback rate was set at 1.2253 mills, the ad valorem tax rate that would generate roughly the same amount of property tax revenue as last year, excluding new construction. A millage rate above the rollback rate is considered a tax increase. 

Collier County Property Appraiser records show the city’s taxable value rose 4.26% to $42.7 billion this year. 

Council also unanimously gave tentative approval to the 2026-27 fiscal year budgets and millage rates for two taxing districts: East Naples Bay, whose budget was set at $400,015 with a 0.5000 millage rate, and Moorings Bay, whose budget was set at $46,250 with a 0.0125 millage rate. 

The second and final budget hearing will be held at 5:05 p.m. Sept. 16 in City Council Chambers, 735 Eighth St. S.