By the Coral Gables Gazette editorial board

In several important ways, Coral Gables’ proposed fiscal 2027 budget demonstrates discipline.

The $318.44 million plan City Manager Peter Iglesias sent to the City Commission moves the city in the direction earlier budget debates demanded. It reduces reliance on reserves. It funds the annual cost of the city’s capital matrices with recurring revenue. It keeps debt service well below the city’s own limit. It entered the budget cycle with the General Fund reserve fully funded at the commission’s 25 percent target.

Those are big. A city that spends one-time money on recurring obligations eventually runs out of room. Coral Gables has been right to move away from that practice. A budget that pays for standing infrastructure needs with money the city expects to collect every year is, on its face, more durable than one that depends too heavily on accumulated surplus.

But that improvement is also what makes this year’s budget question more serious.

Coral Gables is making its budget more dependent on recurring revenue at the very moment that recurring revenue faces a clear and measurable risk. The proposed statewide homestead-exemption amendment on the November ballot, if approved by voters, would reduce the taxable value of homesteaded properties. The city estimates the change would reduce Coral Gables property-tax revenue by $5.7 million in fiscal 2028 and $11.4 million in fiscal 2029 and subsequent years.

That is not a distant abstraction. It is the next budget. To its credit, the city has already published the size of that loss. What it has not shown is how it would absorb it.

The city does not need to oppose or support the amendment to prepare for it. Reasonable voters may differ on the merits of property-tax relief. That is not the question before Coral Gables commissioners as they review this budget. Their responsibility is narrower and more immediate: to show residents how the city would manage the consequences if the measure passes.

That has to happen before final adoption in September.

The proposed fiscal 2027 budget keeps the millage rate at 5.559 for the twelfth consecutive year. Because taxable values rose, that unchanged rate would generate about $8.9 million more in property-tax revenue than the current year. That gives the city breathing room. It also risks masking the decision ahead. A flat rate this year does not answer how Coral Gables would absorb a $5.7 million revenue reduction the following year, or an $11.4 million reduction the year after that.

The city’s own budget makes clear why this matters. Property taxes supply 49 percent of operating revenue. Homesteaded properties generate roughly 48 percent of that property-tax revenue. Personnel costs are rising. Health insurance and retiree benefit costs are increasing sharply. Police and fire labor contracts expire just as the new fiscal year begins. Capital needs remain substantial, from historic facilities and sidewalks to stormwater, sewer and sea-level-rise projects.

None of those obligations waits politely for a better revenue environment.

That is why the City Commission should require a public fiscal 2028 scenario plan before the September budget hearings. Not a dense appendix. Not a vague assurance that staff will monitor the situation. A clear table residents can understand.

It should show the city’s baseline fiscal 2028 assumptions. It should show the projected property-tax loss if the amendment passes. It should separate recurring costs from one-time costs. It should identify which services and capital projects would be protected, which could be delayed or reduced and which depend on future funding decisions. It should show how much reserve use would be contemplated under different scenarios. It should show the practical options for closing a $5.7 million gap and an $11.4 million gap without leaving those numbers for the next budget cycle to solve.

That exercise would not bind the commission to one path. It would make the choices visible.

That is the point of a responsible budget process. Residents are not served by a budget that looks balanced only one year at a time. They are served by a budget that shows what the current decisions commit the city to next year, and what tradeoffs may be required if conditions change.

Coral Gables has reason to take pride in its financial position. Its reserves are strong. Its debt service is manageable. Its credit ratings remain high. Its tax base is large. Its service expectations are also high, and so are the costs of meeting them.

That combination is precisely why the city should be candid now. Strong cities do not wait for fiscal problems to become unavoidable before explaining them. They show the public the road ahead while there is still time to choose among routes.

The fiscal 2027 budget deserves credit for moving recurring capital costs onto recurring revenue. But the next question follows immediately: What happens if that recurring revenue shrinks?

Before Coral Gables adopts this budget, residents should see how the city would answer it.