Cape Canaveral’s city council voted to keep the tax rate flat Tuesday night, even as City Manager Keith Touchberry warned the city cannot balance its books without more revenue.

Touchberry said Cape Canaveral faces a $4 million budget deficit — the result of roughly 15 years of deficit spending that quietly drained the city’s reserve fund to zero.

“This is not cutting us down to the bone — this is cutting into the bone,” Touchberry said. “We do not have what you are asking for. We can’t do it.”

Mayor Wes Morrison pushed back on a tax increase, saying residents had made their position clear.

“Everyone said you’re going to come after us and make the taxpayers pay for it — and that does not sit well with me,” Morrison said.

The council said it will instead pursue spending cuts and explore other revenue options, including selling city vehicles.

The Brevard County Sheriff’s Office is now investigating the city’s financial management to determine whether criminal conduct, employee misconduct, or internal control failures contributed to the crisis.

The budget outlook could shift further if Amendment 3 passes on Florida’s November 2026 ballot, which could reduce the city’s property tax base.