State legislature approves expanding homestead property tax exemption, placing constitutional amendment on ballot
The Florida State Legislature voted Tuesday to put up for referendum this November a constitutional amendment which would raise the homestead property tax exemption from $50,000 up to $250,000 of a property’s value.
The amendment, which was introduced by Gov. Ron DeSantis, would require approval from 60% of the voters in November to go into law. The State Senate voted 30-9 and the State House voted 75-26 to pass the bill.
The bill was opposed by the Lee County Board of County Commissioners, who voted unanimously on Tuesday to send a letter to the state legislature opposing the expanded exemption unless the revenue losses for local governments can be replaced with “stable, recurring replacement funding sources.”
The county projects that the bill could cause a property tax revenue loss of $129.7 million in next year’s budget and a $240.8 million loss in the 2028-29 budget.
State Senator Jonathan Martin (R-Fort Myers) said he has been in touch with county commissioners and heard their concerns. He said he shared their concerns and said he was trying to find out how the proposed changes will affect their budget. He said he hasn’t seen their projections yet as of press time.
He questioned if the county’s projections were taking into account potential growth as a result of the legislation. “Are they assuming that no additional homes are going to be purchased down here or that economic activity is going to stop?”
Martin said that “economic activity increases with tax cuts.”
Martin said the bill passed by the state legislature on Tuesday would shield school districts from losing any tax revenue.
“I feel very strongly that the voters should decide,” Martin said.
Martin had championed a bill last year which would order a study to consider the elimination of property taxes.
In their letter of opposition to the proposal, county commissioners said “These proposals represent one of the most significant restructurings of local government finance in Florida’s history and warrant careful consideration of their long-term impacts on communities throughout the state.”
The letter from the county commissioners notes that local communities are still recovering from Hurricane Ian, as well as subsequent hurricanes Helene and Milton.
Town of Fort Myers Beach Manager Will McKannay said that if Lee County is forced to make budget cuts as a result, that could also impact the town. McKannay said on Monday “We are looking at definitely an impact if it is passed in full.”
McKannay said the hit in tax revenues to the town could be in the neighborhood of $300,000 or more.
“To some, that may not sound significant but when you are me and looking at what that can money can do for us in regards to staff and services, and most importantly the services we provide on a daily basis there would be an impact,” McKannay said.
McKannay said he wasn’t yet prepared to address how the town’s budget would be impacted, as the exemptions wouldn’t go into effect until next year if approved by the legislature and then approved by voters in November.
McKannay said there would be more discussion as the town goes into its budget season this summer.
The town has more than 1,700 homesteaded properties.
Councilmember Rebecca Link questioned whether the town would have to raise the millage rate if the property tax exemption is passed.
“It wouldn’t go into effect until 2027,” Fort Myers Beach Mayor Dan Allers said.
Martin said he was “glad to hear that it was only $300,000.” Martin said “I’ve gotten Fort Myers Beach tens of millions of dollars in funding.
Asked to comment on the homestead exemption proposal, Dan Allers said “It is still too early to fully comment on the Governor’s proposal regarding property tax legislation. There are still many details that need to be discussed and understood before anyone can accurately assess the long-term impacts on local governments and taxpayers alike. I believe we will have a much clearer picture after the upcoming special session and once more specifics of the proposal and any accompanying legislation are released and debated.”
McKannay said the proposed legislation “could significantly reduce a town’s most stable and locally controlled revenue source.” McKannay said that “Any major shift without a sustainable replacement could affect service levels and long-term financial stability. I look forward to reviewing the details and working with state leaders to ensure we can continue meeting the needs of our residents.”
In his announcement calling for the special session to pass his desired homestead property tax exemption legislation, DeSantis cited an increase in property tax revenue collected by local governments over the past seven years (from $32 billion to $60 billion). Much of that increase is due to new homes and businesses in Florida as the state’s population has increased.
As proposed by DeSantis, the new amendment to the Constitution would exempt the first $250,000 of a homestead’s value from taxation and requiring, through law, a schedule for full elimination.
The proposal would require local governments to use remaining property taxes solely for core public needs including public safety, education and schools, infrastructure, and natural resources.
DeSantis also wants to place limits on future property tax assessments on businesses.
The governor also wants homeowners to prove residency of up to five years prior to receiving the property tax exemption.
The proposed amendment requires any person who establishes Florida residency after Jan.1, 2027, to maintain Florida residency for up to five years prior to receiving the increased homestead exemption.
The proposal is receiving widespread backlash from the leaders of local governments whose services could face massive reductions if the proposal is approved by voters.
State Rep. Adam Botana, whose district covers Fort Myers Beach, Bonita Springs, Estero and Sanibel, did not return a message seeking comment.
State Sen. Kathleen Passidomo, whose district encompasses part of Lee County and most of Collier County, referred to a statement by State Senate President Ben Albritton in support of the measure.
Albritton, in a memorandum issued Wednesday, said “In my view, the proposal the Governor explained today does that. I can’t think of a more meaningful way to celebrate America’s 250 then the passage of $250,000 in tax relief for every Florida homeowner. I believe this amendment will provide meaningful relief for Florida families, while protecting businesses from extreme tax increases and safeguarding local funding for public safety, education and our clean water infrastructure.”
Albritton, whose district covers a portion of northern Lee County and most of Charlotte County, commended DeSantis “for starting what has been a robust discussion on property tax relief throughout our state and to our partners in the Florida House for putting forward several meaningful and thoughtful proposals,” Albritton said. Albritton noted that any bill passed by the state legislature will require voter approval.
“At the grocery store, gas station, church on Sundays, and everywhere in between, Floridians I speak with are clear in their support for reducing property taxes,” Albritton said. “I suspect we are all hearing the same things in our home communities. We trust our constituents and they deserve a chance to change the system and decide for themselves what role property taxes should have in our state.”
State Rep. Tiffany Esposito and Rep. Mike Giallombardo, whose districts cover parts of Lee County, also did not respond to emails seeking comment.
DeSantis said he wants to establishe a trust fund to provide grants to local governments to assist with the continuation of core local services.