ORANGE COUNTY, Fla. — Florida lawmakers could be less than 48 hours away from agreeing to put a property tax referendum on the November ballot that promises to save homeowners thousands of dollars, at least in the short term.
The plan pitched by Gov. Ron DeSantis (R) would raise the homestead exemption from $50,000 to $250,000, with property taxes eventually being eliminated for homesteaded properties in a later phase.
Homesteaded properties make up about 30% of homes in Florida, with the remainder being second homes, investment properties and rentals.
Tax analysts believe homeowners would save an average of $3,000 per year under the plan, providing relief to families stretched by rising costs and a slowing job market.
“It’s not sustainable, something’s got to change,” Josh Royu said.
Those who support the plan, including DeSantis, cite the inflated budgets cities and counties currently have compared to their pre-pandemic levels, courtesy of the surge of people moving to the state in the early part of the decade.
Some communities’ budgets have essentially doubled during that time – a fact DeSantis nodded to as he heralded the policy plan during a press conference Monday.
However, the plan – and lawmakers’ discussion – is light on fine print, which opponents have pounced on as they raise concerns about the ramifications of eliminating property taxes.
Property tax reductions for homesteaded properties would disproportionately affect smaller, rural communities and so-called “bedroom” communities, according to analysis of municipal budgets in several Central Florida counties.
Some communities that have fewer homeowners, like Eatonville, would see property taxes reduced by 4% if the homestead exemption was set to $250,000. Larger cities like Kissimmee or Orlando, where commercial properties provide a strong tax base and property taxes only account for a quarter of the budget, would have revenues decline by approximately 10%.
Howey-in-the-Hills, a quiet town in Lake County without many commercial businesses, would see its property tax revenue decline by $750,000, which is 43% of its tax roll, according to data provided by the tax collector’s office. Most other Lake County cities and some Orange County communities, like Belle Isle and Ocoee, were near 30%.
Unlike prior proposals in Tallahassee, the reductions would not exempt schools, police or fire. Police and fire are typically the biggest line items in a city’s budget, often accounting for more than half of all expenses.
Much of the increase in the tax revenue over the past decade has gone toward additional insurance costs and more expensive equipment. A fire truck that used to retail for $500,000 now costs approximately $1 million, driven in part by tariffs to steel and aluminum.
Orange County Tax Collector Scott Randolph said he believed voters don’t have all the facts.
“The median property tax for a homesteaded homeowner in Orange County has gone up $250 [since 2017],” Randolph said. “What did you get for that? You got roads, you got parks, you got schools, you got police, you got fire. I don’t know about you, but my property insurance went up $3,500 just in the last two years.”
Randolph said small cities would struggle to pay for basic services without aid. He also predicted cities would switch to a fee-based system, which would not provide a discount for homeowners based on how long they’ve stayed in place and would not have an annual increase cap like the homestead exemption.
He also noted that the proposal provides no relief for new homeowners for the first five years after their purchase, and predicted that coastal communities would have greater impacts than expected because out-of-state residents would make their beachfront homes their primary residences to take advantage of the tax break.
“The proposal should have been that as long as a house stayed owner occupied, those taxes should have been capped rather than reset on a new owner,” Randolph said. “If you’re a new homeowner, I hate to say, yeah, you should probably vote for this.
The legislature is expected to wrap up debate and voting on Wednesday. Any ballot referendum will need 60% support to pass in November.
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