Florida TaxWatch Provides Analysis of the Governor’s Property Tax Amendment and Legislation, Recommends Florida Taxation and Budget Reform Commission Lead Debate
(Tallahassee, Fla.) -- The Florida Legislature is meeting in special session to consider Governor DeSantis’ proposed constitutional amendment and linked legislation to provide significant property tax relief to Florida homeowners. The proposal has many provisions, but the main ones would increase the homestead exemption to $150,000, beginning January 1, 2027, and then increase it to $250,000, beginning January 1, 2028. This exemption will apply to all property taxes. In addition, the cap on the annual increase in the assessment of non-homestead properties would be reduced from 10% to 5%, but this change would not apply to school property tax levies. Any property taxes remaining after the changes would be restricted to being used solely for core services such as public safety, education, infrastructure, debt, and retirement benefits.
Florida TaxWatch appreciates the conversation about lowering property tax. Our report Save Our Taxpayers - Property Tax Relief Must be Accomplished Equitably highlighted the rapid growth in local government property tax collections and concluded that significant relief is warranted. Our How Counties Compare report shows that most counties in Florida have increases in property tax revenues that have far exceeded the growth in population and inflation over the last 10 years.
However, we do not believe you can solve the problem by simply discussing the increase in property tax. We also need to discuss the rapid increase in local government budgets. If guardrails aren’t put in place to curb local government spending, any reduction in homestead property tax revenue will simply be passed on to non-homestead property owners or replaced with other taxes, fees and assessments.
Florida’s property tax system already shifts billions in property taxes from homesteads to non-homestead property. This proposal would worsen this inequity, even with the reduction in the non-homestead cap. The provision in the Governor’s proposal to use the traditional rolled-back millage rate as the “maximum” rate (unless overridden with supermajority votes) would help taxpayers and slow the tax shift, but it must be remembered that the rolled-back rate would allow local governments to recover lost revenue, without even having to portray it as a tax increase.
It is also worth noting that even if the property tax reforms that have been proposed become law Floridians will still receive a property tax bill to pay for special assessments, which will surely proliferate.
In addition, the hurried evaluation and adoption of this proposal, which became public less than a week ago, is unnecessary. The proposal has a lot of moving parts, and not all provisions are fleshed out, which would require the Legislature to adopt an implementing bill next session. This is a very important issue that requires serious and thoughtful research, an opportunity for public input, and thorough debate. Rather than force this issue to be decided in a hastily called Special Session it would be far better to have this issue taken up by the constitutionally mandated group Florida TaxWatch helped establish---the Taxation and Budget Reform Commission (TBRC).
Florida’s Taxation and Budget Reform Commission will be appointed in 2027. Its 25 members will have the time needed to fully study not only the property tax issue, but a wide range of budget, taxation, and government efficiency issues. They can not only make recommendations to the Legislature---they can place issues like property tax reform directly on the ballot for voters to decide.
We commend the Governor for bringing such an ambitious plan forward. It contains some good provisions that can provide a starting point for the TBRC, such as reducing the cap on annual increases in non-homestead property assessments from 10% to 5%. This would bring us closer to the Florida TaxWatch “Save Our Taxpayer” proposal to cap all properties at 3%.
We agree that Floridians need relief from ever escalating property taxes. That relief is needed by homestead property owners and non-homestead property owners alike. Issues like how the counties pay for core government functions if we enact property tax reform, or even what functions of government are considered “core”, need to be thoroughly discussed and considered as well.
It must be considered that replacing lost school property taxes, as well as creating the mandated state trust fund to help local governments pay for core services, would result in billions in recurring expenses for the state. This may not be prudent with potential future budget shortfalls already estimated by the state. A thorough, official fiscal impact estimate must be developed before a major tax change such as this is adopted.
We understand the temptation to quickly pass property tax reform. However, for all the reasons stated here Florida TaxWatch believes the better approach is to take our time and let the Florida Taxation and Budget Reform Commission tackle this important task.
About Florida TaxWatch
As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute, and the trusted “eyes and ears” of Florida taxpayers for more than 47 years, Florida TaxWatch (FTW) works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on taxpayers and businesses. FTW is supported by its membership via voluntary, tax-deductible donations and private grants. Donations provide a solid, lasting foundation that has enabled FTW to bring about a more effective, responsive government that is more accountable to, and productive for, the taxpayers it has served since 1979. For more information, please visit www.floridataxwatch.org.
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