When Tampa City Council rejected Mayor Jane Castor’s proposal to increase property taxes in 2023 the search began to find other ways to fund the city. One place everyone started looking was “fees”. Building fees, impact fees, even a possibly new “public safety impact fee.” 3 years later, a study has finally been released outlining the fiscal reality for the Development and Growth Management (DGM) division and proposed changes to right the ship. About a third increase to construction services permits and significant changes to other DGM fees. The study recommends phasing in the increases starting October 1, 2026 at 15% increase with 5% increases in ’27, ’28, and ’29 — though staff has already signaled nothing changes before March 2027.

What is Development and Growth Management?

The DGM department is the umbrella for everything development: permitting and inspections (Construction Services), plus land development coordination, architectural review, real estate. All are primarily funded by the general fund save for Construction Services. That department keeps a separate fund as state law prevents building permit fees from being used for general government. F.S. 553.80 — most recently tightened by SB 1080, among the many headaches that bill added to local government — says building permit fees “may only be used for carrying out the local government’s responsibilities in enforcing the Florida Building Code.” The statute allows “direct costs and reasonable indirect costs” of plan review, inspections and permit processing — but expressly prohibits funding “Planning and zoning or other general government activities.” A point emphasized in the fee study.

The remainder of DGM is funded primarily with General Fund dollars to the tune of $6.65 million a year. Currently other fees collected by DGM cover 19% of their budget.

FY2025 is the city’s own in-year projection, FY2026 is the budget

How we got here

In 2019 the city passed a resolution that imposed a 13% fee on permits for a Customer Services Enhancement Fund to cover technology, software, and vehicle upgrades for staff. Through 2023 permitting fees more than covered cost. But in 2024, permit revenue started to fall — post-pandemic construction cooling — from its $16.5 million peak, while spending rose to almost $19 million, leading to a deficit of $3.3 million. In 2025 the city projects it will be slightly worse, down $3.8 million. In both years, the administration was able to cover the gap with the savings in the construction services fund. In 2026, another $5.3 million in — half of it from that 2019 Enhancement Fund — effectively leaving the reserve empty. The study puts it bluntly: “short-term reliance on financial support from the General Fund until new rate adjustments are implemented.”

While the study that was released this week is relatively new, dated July 7, 2026 and references data for FY26 through 3/31/26, the issue clearly is not. Former (and current candidate) Bob Buckhorn is famously attributed the quote “I’m never going to raise development fees” and solved his budget problems with a property tax increase (though not as big as he asked for). When that same tactic failed for Castor, she punted on the politically costly decision of raising fees, buying three years by spending down the reserves. Now, faced with possibility of an extraordinary shift in funding through cuts to property tax the city is faced with the reality they may need to dip into the General Fund or make drastic changes to Development & Growth Management.

What would change

For now, we don’t know. This is just a study that was provided at the request of Council Member Bill Carlson after repeated calls from the public on an update. The accompanying memo asks for a workshop in September but they are still evaluating the study. If the city were to adopt the fees recommended in the study, building permits would see a 30% increase — $35 for a general building permit. Some of the consequential changes recommended by the study for the planning and development fees would include:

• Permit fee – $50 to $115.
• Grand tree evaluation – $120 to $442
• Appeal to building official – $253 to $776
• Records research (per hour) – $20 to $80
• Temporary Certificate of Occupancy $155 to $586
• ADU S1 – $194 to $445
• Petition for Review – $271 to $1,365
• Live local and HB 1339 – new fee $2,642
• Decision of Architectural Review Commission – $271 to $4,000
• Decision of Barrio Latino Commission – $50 to $4,000

For new construction, residential fees would go from 67¢ to 81¢ per square foot while non-residential fees would double from 25¢ per square foot to 52¢ — and that change comes at the first step, not spread across the four years. The tilt is by design. The study says the majority of the additional revenue “will be recovered from the non-residential / commercial developments,” not homeowners.

What’s next?

The staff memo accompanying the study pumps the brakes. Staff isn’t recommending the city adopt the study — they’re continuing to evaluate it, and don’t see any proposed changes taking effect until March 1, 2027 “which would also align with anticipated Water and Wastewater capacity fee changes.” The memo also acknowledges any FY27 budget impact will need to be addressed through a separate adoption process. Put that against the calendar: the mayor presents her budget in 2 weeks on July 30 and FY27 starts October 1st. The “short-term reliance on financial support from the General Fund” the study warns about isn’t just a scenario anymore.

And all of that is assuming permit volume stabilizes. The past 2 years both permit volume and revenue have decreased — permits issued peaked at 27,167 in 2022 and are estimated at 22,731 this year, and the value of new construction has fallen by nearly half since 2020, $4.6 billion then to $2.5 billion now. And despite that, the administration projected record high permitting revenue for FY26. The study doesn’t make that bet: Raftelis builds its forecast on $14.9 million in permit revenue, $1.3 million less than the city’s own budget, and assumes activity “is not projected to continue declining.”

[Source study Table 3; 2025 is estimated]

If volume and revenue follow the same pattern, bigger decisions will need to be made about FY26 — this time with no reserve left to cover the miss. To be fair, Construction Services has come in 11–16% under its budget every year since 2022, so the hole may end up smaller than the budget math suggests. And if they continue to decrease at the same rate, by the time the full rate change is implemented — now starting no earlier than March 2027 — the city would be back where it is today. A Construction Services department running at a $3.8 million deficit and its parent division pulling nearly $7 million a year from the General Fund. And all of that assumes no growth in operating costs.

July 30th should provide some answers about how the city plans to cover the gap. The fee decision itself now has its own timeline.