CAPE CANAVERAL, Fla. – Cape Canaveral city leaders are weighing a property tax increase as they work to close a projected $4 million budget gap while rebuilding emergency reserves that officials say were depleted after years of overspending.
The City Council held a special budget hearing Monday to determine the maximum property tax millage rate for the 2026-27 fiscal year. City officials said the city needs about $20 million to fund next year’s budget but is roughly $4 million short under the current tax rate.
Residents urged council members to avoid raising taxes, arguing taxpayers should not be responsible for decisions made by previous city leaders.
“It looks like folks in Cape Canaveral have had a spending problem in the last 10 to 15 years, and now we the citizens have a pay-for-it problem,” one resident told the council.
Mayor Wes Morrison said no one wants a tax increase but acknowledged the city faces difficult financial decisions.
City Manager Keith Touchberry said the city had been spending reserve funds faster than they could be replenished.
“We literally were spending our reserves more than our base was in taxes and then drawing down on our reserves,” said a council member. “As we move forward, we have to look at what’s more manageable for the city.”
Last month, Touchberry announced he had asked the Brevard County Sheriff’s Office to investigate the city’s former financial leadership after learning the council was never notified that the city’s emergency reserve fund had fallen below the minimum level required by city policy.
According to Touchberry, city policy required the council to be notified in February 2025 after an audit showed the emergency reserve fund had dropped below 8% of the city’s annual operating budget. That notification never occurred.
The Brevard County Sheriff’s Office has confirmed it is investigating the city’s financial leadership under the former city manager.
City officials say rebuilding the reserve fund would likely require increasing the millage rate. However, Morrison and several council members said years of overspending should not automatically result in higher taxes for residents.
“We should not be putting this on the backs of taxpayers,” one council member said during the meeting.
The council can lower the proposed maximum millage rate before adopting the budget next month but cannot raise it above the maximum rate approved during Monday’s hearing.
News 6 also contacted the Brevard County Sheriff’s Office for an update on its investigation but had not received a response as of Monday evening.