💰 Tax Hike Coming – Niceville proposes raising property taxes from 4.0 to 4.5 mills, about $20/month on a $500K home.
🏟️ Sports Complex Priority – City leaders say the increase will fund the most-requested project: a long-awaited sports complex.
🏚️ Aging Assets – Funds will also go toward replacing old vehicles, fixing city buildings, and completing delayed projects.
Niceville’s City Council is poised to approve its second property tax increase in five years, a move they say will finally deliver the city’s most-requested project: a long-awaited sports complex.
But, city leaders argue, the increase will allow the city to finally move forward on the most requested item on residents’ wish list – a sports complex.
In total, the increase in taxes works out to $20 per month on a home valued at $500,000.
In addition to the sports complex investment, City Manager David Deitch says he plans to recapitalize city assets like vehicles and buildings, which he says have been neglected over the last couple of decades to keep taxes artificially low.
City Manager David Deitch sat down with me for an hour last week after the city council meeting to explain the finer points of the proposed budget, which city council leaders will vote on in September.
Deitch said that for at least 15 years before he started with the city, the city decided not to raise taxes. The decision meant that, as state of Florida-generated revenues (like the gas tax, state shared revenues, and utility fees) dropped over the period, there were not enough taxing revenues to pay for expenses other than the city’s enterprise funds. Enterprise funds are fee-for-service departments of the government, such as water and sewer, which charge fees.
Essentially, the city was robbing Peter to pay Paul, which meant savings and enterprise funds are much weaker than they were several decades ago.
In addition, city vehicles have had to last longer, which helps balance budgets in the short term, but adds to the monthly maintenance costs in the long term. Holding off on buying new vehicles means that, according to Deitch, the city must “replace numerous vehicles all at once instead of spacing the purchases out over several years.”
City buildings, Deitch says, are in the same predicament.
“Maintenance is killing us because [buildings and vehicles] are so old and falling apart,” Deitch explained, “We can’t keep kicking the can down the road.
That’s why Deitch initially proposed a .2 millage rate increase from 4.0 to 4.2.
It would allow the city to begin replacing critical buildings and vehicles – and build projects which are big tickets on the budget, like the Dock and Pier portion of the Niceivlle Landing (paid for through Community Redevelopment Agency money), finish the reclaimed water piping to Deer Moss Creek, add a water tower near the subdivision, and do the engineering work to expand a fire station in the neighborhood.
But it also allows the city to start projects that were supposed to have begun years ago – but were sidelined for one reason or another on the Turkey Creek South parcel of land. According to Deitch, the city received grant money to expand Turkey Creek on the land to the east of the Turkey Creek Complex. For one reason or another, the City did not finish the tasks it told the state it would finish along the terms of the grant. Now, the City faces clawback provisions from the State. So, either way, the money is coming out of the city’s coffers – Deitch argues that it’s better to make improvements than to give the money back to the state.
City Manager Deitch showed me the proposed budget, which comes in at about $3 million less than last year’s budget.
So why is there a tax increase?
Because of those state revenues we brought up earlier, which are shrinking in size. Add to the shrinking pot of state money the fact that expenses have gotten more expensive.
It means that the city’s property taxpayers are the ones who should bear the extra weight, about $1 million more this year than in FY 2025.
“We’ve got a ten percent increase in our insurance costs. We’ve got a 12% increase from Florida Power and Light,” Deitch said. Currently, Florida Power and Light is asking the Florida Public Utility Commission for the single most significant rate hike in American history, which they are likely to get.
Also worth noting – roughly 7.1% of Niceville’s households are exempt from property taxes. Records requests to the Okaloosa County Property Appraiser revealed that 544 households have a 100% disabled veteran, according to the appraiser. The 100% disabled veteran status, as defined by Florida state law, exempts the homesteaded property where they reside from paying any property taxes. Many more have smaller property tax exemptions that are connected to laws passed by Florida to reduce the tax burden on partially disabled veterans.
All told, the 2026 fiscal year budget is $2.94 million smaller than last year’s, weighing in at $53.96 million. $8.55 million (15.8%) of that budget comes from property taxes.
Now to the main event – the proposed sports complex.
You might have caught earlier that City Manager Deitch proposed a 4.2 millage rate. Thanks to our elementary school math teachers, we know that is not 4.5 – indeed, it’s less.
So how did we go from 4.0 to 4.5 with a stop at 4.2 for a brief moment?
City Manager Deitch proposed a 4.2 millage rate, which would have resulted in a slight increase in the tax rate of about $10 per month for a homeowner with a house valued at $500,000 by the property appraiser (they typically assess your value much lower than your Zestimate, btw).
Councilmember Alley asked Deitch at a budget meeting whether this included funds to initiate a long-awaited sports complex in the city – likely on the Mullet Festival Site, pending a deal with the Air Force for a long-term lease.
Deitch answered that it didn’t.
After a discussion, based on notes from the city’s minutes of their July 29 budget meeting, the city’s five councilmembers decided that they would take a verbal (or social-media-based) lashing from the public for raising taxes anyway. They should make sure that they include the money for starting the ball rolling on the sports complex.
Deitch said he believes this choice is a safe bet. After all, their strategic planning sessions, town halls, and community conversations have told them one thing: that the most critical issue to taxpayers in the city is the construction of a sports complex for kids to play on.
“If the community doesn’t want the ballparks, let me know and we’ll push it back,” Deitch said, “If the public does not want to spend this money on a sports complex, they need to let their city council know.”
Mid Bay News’s Collin Bestor Contributed to this report.
Christopher Saul is the Publisher at Mid Bay News. You can email him at Christopher@midbaynews.com
Pro Communi Bono
St. Francis De Sales, Ora Pro Nobis!
Register or login with Mid Bay News and never get another pop up on our site!
