If Florida voters decide to slash their property tax bills in November, local governments will lose $12 billion annually in revenue by early next decade, according to an analysis by nonpartisan economists.
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Florida’s Revenue Estimating Conference, a panel of economists that studies the fiscal impacts of legislation, released its findings Friday, the first to come from analysts who stand apart from the political fray. The report included the revelation that municipal budgets in Orange County would lose about $812 million annually, an amount that — for perspective — is close to half the entire budget of the city of Orlando.
Local governments in Osceola would lose $253 million annually, Lake would lose $242 million and Seminole would lose $233 million.
The findings provide the clearest picture so far of the impacts of the proposed ballot initiative, which would create a $150,000 exemption for primary homes in 2027 and a $250,000 exemption in 2028. That would save homeowners thousands on their annual tax bills, but also greatly reduce the pool of funding cities and counties use to fund core services like police and fire protection, parks, trails and libraries.
Voters will have their say on it in November. The measure needs 60% support to pass.
Typically, the Revenue Estimating Conference, or REC, would issue its analysis before lawmakers vote on such a plan, but the tax cut measure’s quick turnaround — Gov. Ron DeSantis called a special session and the Legislature voted on it in little less than a week — prevented that.
“This information would have been much more helpful before the Legislature voted to put this question before voters” said Holly Bullard, chief strategy officer for the Florida Policy Institute. Lawmakers also approved the ballot language voters will consider without benefit of the analysis, Bullard noted: “And as it is currently written, [the analysis] won’t be in the ballot summary so that voters understand the full scope of what’s at stake.”
The conference doesn’t endorse the plan as good or bad, but instead spells out how it would impact the state.
For instance, in 2027-2028, it projects cities and counties to lose roughly $5 billion, growing to nearly $9 billion in 2028-2029. And after six years it would balloon to $11.8 billion.
Individual municipalities in Central Florida would see a similar progression, starting with 2027-2028 when Orange would lose about $290 million, Osceola $85.4 million, Lake $100 million and Seminole $102 million.
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Ever since the proposal was first brought forward, local officials have fretted over its potential impacts on operations and services — albeit with an incomplete picture of its impacts.
The REC’s findings on lost revenue came in even higher than number crunchers in Seminole had projected, commissioner Lee Constantine said.
The result, he said, would be the county slashing services to the point where “we’ll become Mississippi,” he said. “Or less.”
“The thing that’s very frustrating to me is whenever you reduce livability … the first thing that goes down is your property value,” said Constantine, a Republican. “Everything they say they want to do, this is the antithesis of that.”
Orange County’s internal review, meanwhile, projects a loss in revenues only a quarter as much as the REC forecasted — though that doesn’t include cities, towns and special districts as the state panel did.
“For the Orange County Board of County Commissioners, the estimated fiscal impact of the proposed $150,000 homestead exemption during the first year would be approximately $165 million,” budget director Kurt Peterson said. “The proposed $250,000 homestead exemption during the second year is estimated to have an impact of approximately $275 million.”
While the plan has been championed as a way to provide tax relief to Floridians facing rising costs on goods, homeowners insurance – and also property taxes – it’s faced growing opposition from pro-business conservative entities such as Florida TaxWatch, the Tax Foundation and the Wall Street Journal’s Editorial Board.
The Wall Street Journal warned that the proposal would harm Florida’s competitiveness and could force cities and counties to increase taxes on commercial property, businesses and other property.
“So it’s a shame that Gov. Ron DeSantis is using his final months in office to push a poorly designed measure on the November ballot that would put his state on the slippery slope of a progressive property tax regime,” the editorial reads.
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