Florida's Bold Move: Eliminating Property Taxes and the Path Forward

Governor Ron DeSantis has unveiled an ambitious plan to eliminate property taxes for Florida homeowners, aiming to alleviate financial burdens and stimulate economic growth.

 

This proposal has sparked a statewide conversation about its feasibility and the potential impacts on local government funding.

 

In March 2025, the Governor introduced a short-term relief measure, proposing an average $1,000 rebate per homestead to offset state-mandated school property taxes for the year.

 

This initiative is seen as a stepping stone toward broader tax reforms anticipated in 2026.

 

Looking ahead, the administration is advocating for a constitutional amendment on the 2026 ballot to eliminate property taxes on homesteaded properties.

 

Reports indicate that this move is part of a larger strategy to enhance government efficiency and reduce unnecessary local expenditures.

 

However, the path to such a significant change involves several critical steps:

 

1) The Florida Legislature must approve placing the amendment on the ballot, requiring a three-fifths majority in both chambers.

 

2) Voters must then approve the amendment with at least 60% support statewide.

 

3) Subsequent legislation would be necessary to define the amendment's scope, implementation timeline, and strategies for replacing the lost revenue for schools and local governments.

 

It's important to note that Florida's Constitution mandates a two-thirds legislative vote to enact or increase state taxes or fees, adding complexity to establishing new revenue mechanisms.

 

The focus of the proposed tax elimination is primarily on homesteaded properties, which are owner-occupied residences.

 

Commercial properties and non-homestead residential properties would continue to be taxed, allowing counties and cities to retain some property tax revenue.

 

Nonetheless, eliminating property taxes on homesteads would result in a substantial revenue shortfall.

 

Preliminary data from 2025 suggests that such a move would remove approximately $18.5 billion statewide, with counties losing about $7.8 billion, school districts $7.7 billion, and municipalities $3 billion.

 

To address this significant funding gap, a multifaceted approach is under consideration:

 

1. **State Backfill for Schools:**

 

- Redirecting a larger share of state general revenue to K-12 education.

 

- Establishing a dedicated statewide surtax or fee earmarked for schools, which would require supermajority approval.

 

2. **Expanded State Revenue Sharing:**

 

- Increasing the local share of existing state taxes through statutory changes.

 

- Creating protected state-to-local transfers for essential services such as public safety and infrastructure.

 

3. **Local Option Levers:**

 

- Adjusting local option sales surtaxes, subject to voter approval.

 

- Expanding tourist development taxes and authorized visitor surcharges tied to public safety and infrastructure.

 

- Implementing special assessments and user fees for services like fire, EMS, and stormwater management.

 

4. **Structural State Tax Changes:**

 

- Reinstating or modifying statewide taxes or fees with dedicated trust funds for county and school funding.

 

- Broadening the sales tax base to include more services and narrowing exemptions to improve revenue stability.

 

5. **Spending Controls and Efficiency:**

 

- Initiating state efficiency programs focused on auditing local budgets, consolidating services, and promoting shared-service models.

 

- Implementing performance-based budgeting and procurement reforms to optimize spending.

 

The timeline for these proposed changes includes legislative actions in the 2025–2026 session, aiming to place the constitutional amendment on the 2026 ballot.

 

If approved, a multi-year phase-out is anticipated to prevent fiscal disruptions, with initial measures focusing on backfilling school funding.

 

Counties are expected to adapt by:

 

- Utilizing enhanced state revenue sharing earmarked for core services.

 

- Adjusting local option sales surtaxes, subject to voter approval.

 

- Expanding tourist development taxes and authorized visitor surcharges.

 

- Increasing the use of special assessments and user fees.

 

- Modifying utility and communications taxes within statutory limits.

 

- Implementing impact and mobility fees for growth-related capital projects.

 

The success of this initiative hinges on detailed implementation plans, statutory changes, and securing voter approval at the 60% threshold.

 

As Florida embarks on this bold endeavor, the coming years will be pivotal in shaping the state's fiscal landscape and ensuring the continued provision of essential public services.