By the Coral Gables Gazette editorial board

Coral Gables enters its new budget season with a $308.2 million spending plan that keeps the city’s tax rate unchanged for the 11th consecutive year. That stability is welcome. But beneath the surface, the budget continues to lean on reserves to cover recurring costs, while also adding new positions to the payroll. This approach cannot sustain itself.

At the heart of the budget are people. City services depend on the firefighters, police officers, public works crews, planners and clerks who make local government function. Their work is often invisible until it is not, and the cost of losing them is far higher than the cost of keeping them. Retention saves money. Recruitment and training drain it. That is why protecting competitive compensation is essential in a labor market where municipalities compete for talent.

The central fiscal challenge for Coral Gables is not whether to shave a quarter point off the millage rate, as Commissioner Melissa Castro has proposed. Nor is it whether to hold the line at 5.559 mills, as the Budget and Audit Advisory Board recommends. The true question is how to balance services and long-term obligations while honoring both employees and taxpayers.

But if compensation is off the table, headcount cannot be. The city’s largest expense is labor, and the proposed budget expands that expense. It adds seven new full-time positions, ranging from procurement and audit support to tree trimming and fleet maintenance, on top of the 20 new roles created in the Building Division. At the same time, the budget relies on $31.2 million in reserves, including $10 million from the general fund, to balance its books. That is unsustainable path.

When finances are strained, the first step is to stop adding to the burden. That means resisting the temptation to keep adding positions simply because surpluses from prior years make it possible in the short term. A reserve drawdown may cover a salary this year, but what about next year? Or five years from now? Unless growth in assessed property values or other revenues outpaces payroll, today’s new hires become tomorrow’s fiscal burden.

None of this means services should decline. Quite the opposite. A city with $26 billion in assessed value and $137 million in property tax revenues must deliver visible results for its residents. That requires greater productivity and smarter use of existing staff. It requires smarter deployment of existing staff, supported by technology, training, and better systems. Coral Gables should embrace efficiency measures that allow its workforce to do more with less.

Commissioners should also be disciplined about the use of reserves. Drawing $8.6 million from the capital improvement fund and $10 million from the general fund may work in a single fiscal cycle, but reserves are meant for one-time needs — infrastructure projects, emergency recovery, or strategic investments. Using them to cover recurring payroll expenses erodes the city’s cushion against downturns and undermines its ability to plan for the future.

Debt, too, cannot be ignored. The city carries $99.5 million in principal debt, with obligations of $132.8 million including interest. Mayor Vince Lago has been right to warn that further borrowing risks crowding out essential improvements. A city that overextends itself on both payroll and debt will have little room to maneuver when the next crisis comes.

The upcoming budget hearings should be an opportunity to reset priorities. Commissioners must focus on structural reforms. The city can demonstrate fiscal leadership by committing to a hiring freeze for non-essential positions, adopting a staffing plan tied to strategic goals, and creating a public dashboard that tracks both headcount and service outcomes. Such transparency would allow residents to see that fiscal responsibility is not about denying services but about delivering them efficiently.

Coral Gables is fortunate. It remains one of the country’s most desirable places to live, with strong property values, stable revenues and a reputation for quality of life. That strength, however, should not breed complacency. A budget propped up by reserves and expanded payroll is a budget that risks its own stability.

The city owes its employees fair pay, and it owes its residents sound stewardship. Those obligations are not in conflict. They point to the same conclusion: Coral Gables must become more productive with the staff it has, protecting compensation while resisting unnecessary growth. The city can maintain excellence not by expanding endlessly, but by focusing on efficiency, innovation and accountability.

The first hearing on Friday and the final vote later this month will test whether commissioners are ready to embrace that discipline. Residents should watch closely. What is at stake is the city’s capacity to govern itself wisely for the decade ahead.