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Council member Theresa Pontieri questioned the routine of rezoning commercial land for residential use, further skewing the city's tax base.
The council also voted to annex a 330-acre future residential development on Seminole Woods.
A community of 275 upscale town-home apartments in a gated community on Citation Boulevard was recommended for approval in Palm Coast.
The land at the southeast corner of Citation and Belle Terre Boulevards and includes a public dog park and commercial use.
To make the budget revenue neutral, the council would need to reduce the millage rate to the rolled-back rate and cut $2.8 million in proposed expenses.