DAYTONA BEACH, FL — A growing fiscal standoff between state lawmakers and local officials has thrust Daytona Beach into the spotlight, as Florida legislators demand the city take immediate action to spend down more than $11 million in accumulated building permit and licensing fee revenues—funds that have remained largely idle for years.
The controversy centers on a cache of restricted-use funds collected from developers, contractors, and businesses over the past decade. These fees, intended to support building inspections, code enforcement, and infrastructure improvements, have instead ballooned into a surplus that watchdogs say violates the spirit—if not the letter—of Florida law.
According to a recent report by the Joint Legislative Auditing Committee, Daytona Beach has consistently carried forward excessive balances year after year, despite multiple warnings from state auditors. The committee’s findings suggest that the city has failed to either spend the funds on their intended purposes or refund them to payers, as required under state statutes governing fee-based revenue.
“This isn’t just a Daytona Beach issue—it’s a matter of statewide fiscal integrity,” said State Senator Tom Leek (R-Ormond Beach), who has filed legislation that would compel the city to allocate the funds toward long-overdue stormwater infrastructure upgrades. “These are not general tax dollars. They were collected for a specific purpose, and hoarding them undermines public trust.”
The proposed bill would override local discretion and direct the funds toward critical stormwater repairs, a pressing need in a city increasingly vulnerable to flooding and sea-level rise. Leek’s proposal has garnered bipartisan support, with lawmakers citing similar concerns in other municipalities across Florida.
But Daytona Beach officials are pushing back. During a tense hearing in Tallahassee earlier this month, Mayor Derrick Henry and City Manager Deric Feacher defended the city’s handling of the funds, arguing that the balances reflect cautious fiscal planning rather than negligence. Henry also expressed concern that legislators appeared to have access to internal documents that had not been shared with city leadership.
“We are not hiding anything,” Henry told the committee. “But we also believe in local control and the right of our city to determine how best to serve our residents.”
City commissioners have echoed that sentiment, with some accusing the state of political overreach. Commissioner Paula Reed called the legislative scrutiny “an insult to our governance,” while another commissioner bluntly told lawmakers to “mind their own business.”
The standoff has sparked a broader debate about the balance of power between state and local governments. While some residents and developers applaud the state’s intervention as a necessary check on municipal inertia, others worry that Tallahassee’s heavy hand could set a dangerous precedent for micromanaging city budgets.
“This is about more than just Daytona Beach,” said urban policy analyst Dr. Carla Jennings. “It’s about how we define fiscal responsibility and who gets to make those decisions—local leaders or state legislators.”
Meanwhile, the city’s backlog of infrastructure needs continues to grow. Daytona Beach has faced mounting challenges in recent years, from aging stormwater systems and pothole-ridden roads to outdated permitting software and understaffed inspection teams. Critics argue that the unspent funds could have been used to address these issues long ago.
According to city records, only about $590,000 of the $11 million has been spent in recent years—mostly on minor facility upgrades and vehicle purchases. The rest remains in reserve, drawing scrutiny from auditors and frustration from residents.
“I paid thousands in permit fees to build my business,” said local contractor Luis Martinez. “That money was supposed to go back into the system—to make inspections faster, to improve services. Instead, it’s just sitting there.”
As the legislative session heats up, the fate of the funds—and the city’s autonomy—hangs in the balance. If Leek’s bill passes, it could force Daytona Beach to rapidly deploy millions in capital improvements, reshaping the city’s infrastructure priorities overnight. If it fails, the city may retain control but face continued pressure to act.
Either way, the showdown is likely to reverberate far beyond Volusia County, serving as a cautionary tale for municipalities across Florida about the risks of fiscal complacency—and the growing appetite in Tallahassee for oversight.
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