Budget season is still a few months away for local governments, but Orange County officials are already gearing up now – as numerous trends and developments are compounding the pressure on an already-tight budget. And some of those pressures may hinge on the outcome of the 2026 election.
“We’re still seeing high fuel costs, heavy inflation, (and) there’s always uncertainty with tariffs,” said Orange County budget director Kirk Vaughn at last week’s meeting of the Orange County Board of Commissioners. “(Our budget) did anticipate higher costs for fuel, but that’s just the initial cost – and that (also) permeates through the market, so we should start seeing that in other realms as well.”
Vaughn said high gas prices will drive up costs overall, but the bills are also coming due for some specific big-ticket items that Orange County already approved.
“The big things will be the interest payments on new elementary schools, as well as principal payments for the (new) crisis care center,” he said.
Click here to watch last week’s Orange County Commissioners meeting. Vaughn’s presentation begins at one hour and 26 minutes.
And those higher costs are hitting the budget at the same time Orange County is seeing an unexpected drop in tax revenue.
Counties across the state are seeing a dip in property tax revenue, thanks to the so-called “Blue Ridge loophole” in state law that allows apartment developers to avoid paying taxes by establishing nominal partnerships with nonprofits. A bill to close the loophole has bipartisan support in the General Assembly – but has not yet been brought up for a vote.
And on top of that, Vaughn said Orange County has also experienced a surprising drop in sales tax revenue as well.
“Our gross collections increased by 5 percent, (but) we had a significant increase in the amount of refunds from nonprofit organizations – which took us from a 5 percent increase to a 3 percent loss,” he said.
Orange County Budget Director Kirk Vaughn addresses county commissioners on September 29, 2026.
Vaughn told county commissioners those are some of the biggest drivers putting pressure on Orange County’s budget right now – but there could be more coming soon.
“Our biggest pressure is always the legislature,” he said. That’s partly because the General Assembly is passing down some additional costs to the counties without additional funding – most notably an increase in the local cost of SNAP benefits.
But Vaughn said the legislature is also a factor because voters could approve a state constitutional amendment this fall that would allow for extra limits on local governments’ ability to raise property taxes. What’s not on the ballot, though, is any discussion of what those limits might be: Vaughn said state lawmakers would make those decisions later, and that could be another cause for concern.
“They could limit tax increases by a flat amount – (or) we could see requirements for unanimous board approval of any tax increases,” he said. “That’s in Florida currently.”
And while state lawmakers could exempt any tax increases that local voters had already approved, it’s also possible they may not.
“We put a bond referendum on the ballot in 2024, (and) we included language in there that it would include a tax increase,” he said. “But there’s no requirement that this legislative amendment respects that vote that the voters made.”
That constitutional amendment is one of three on your ballot this fall. Vaughn said Election Day could provide more clarity on where the county budget stands for the coming fiscal year – but even larger infrastructure costs are looming closer to the end of the decade, and he urged county commissioners to start thinking about that now.
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