Economists discuss possible impacts of eliminating property tax on governments large and small

As the Legislature explores the future of property taxes in the state, tensions continue to swirl around whether local governments manage money the way state lawmakers would like.

“We need to rename this ‘Truth in Millage^[1]’ and ‘rollback rate^[2]’ to something else, because there’s no truth and it doesn’t feel like anything rolls back,” said Rep. Yvette Benarroch, a Marco Island Republican.

It was a theme that came up as lawmakers received an hourslong briefing on the significance of property taxes to local governments of various sizes.

Rep. Toby Overdorf, a Palm City Republican who chairs the House Select Committee on Property Taxes, called the application and exclusion from certain tax exemptions unfair. He also noted that many homeowners can still see their own property tax payments go up even when local governments vote to lower tax rates.

The conversation unfolded as Gov. Ron DeSantis, looking toward his last year in office, wants the Legislature to explore eliminating^[3] property taxes on homesteaded properties.

While that idea may sound like a simple one, lawmakers are in the process of exploring what impacts it could have and how they would be felt across the state. Various exemptions, rate differences and taxpayer protections already exist in Florida law, much of it already eliminating taxable value from tax rolls.

Amy Baker, coordinator for the state’s Office of Economic and Demographic Research^[4], discussed at length the Save Our Homes restriction^[5], a voter-approved measure that means a property’s assessed value can only rise 3% a year regardless of the real estate market. That has a substantially greater impact in South Florida counties with high real estate values but where many homeowners have held onto property for decades.

She said that statewide, some 4.65 million homesteaded properties benefitted either from Save Our Homes or from portability allowing homeowners to bring that benefit from one homestead to another. But the impact varies substantially county to county. In Union County, the reduction from just value of a home and the assessed value is less than $17,000. But in Monroe County, it’s about $580,000.

On top of that, homestead exemptions of up to $500,000 can already limit the total collections governments receive, which some lawmakers noted in the meeting.

Rep. Allison Tant, a Tallahassee Democrat, said some of the fiscally constrained counties within her district feel that revenue punch. She said the impact of a South Florida property owner transporting a Save Our Homes tax limit to a much lower valued North Florida county can radically reduce the taxes collected by local governments.

“For a larger county, it is a small amount, but for a Madison (County), which is the fifth-poorest county in the state, that’s a huge hit to them,” Tant said. “I’m curious as to how they make up for that when someone moves up and their entire property now is completely exempt.”

When it comes to school funding, districts around the state collectively receive about half their funding from property tax, 47%, and another 52% from other state revenue sources, according to Jim Zingale, Executive Director of the Florida Department of Revenue^[6]. But that varies district by district as well.

In fiscally constrained Union County, for example, only about 8% of funding comes from property taxes. In wealthier counties such as Collier of Sarasota, more than 81% of funding comes from that source. But the state disburses funding using per-student allocations to try to avoid inequity.

Overdorf will hold another meeting Tuesday that will include a presentation from the Governor’s Office on the topic of property tax reform. Lawmakers are expected to discuss the matter throughout the Legislative Session and likely craft a ballot referendum voters will consider in 2026.

Post Views: 0