Florida Passes Property Tax Cuts in Challenge for Local Funding

Florida voters passed sweeping property tax cuts in Tuesday’s election, a move that will gut local government funding.

Amendment 3, the brainchild of outgoing Governor Ron DeSantis, will lower property taxes for primary residences by increasing the portion of their home’s value that isn’t taxed, known locally as a homestead exemption. In January, that amount will rise from $50,000 to $150,000, and by 2028, the exemption will increase to $250,000 and continue increasing in line with inflation rates. The amendment excludes school board taxes.

Critics ranging from left-wing think tanks to Republican politicians and sheriffs have warned that the measure could have dire consequences for public services, especially since Florida has no income tax. But the state has become increasingly unaffordable for residents as housing prices and insurance premiums soar, alongside higher gas and grocery bills.

“Big win on Amendment 3 for Florida homeowners!” DeSantis wrote on X late Tuesday. He’s long been critical of property taxes and pushed to abolish them completely.

The measure was approved by 62% of voters with nearly 99% tallied, narrowly passing Florida’s 60% threshold for constitutional amendments.

The tax cuts will hit hard in rural cities and counties, where many or most homes are valued around $250,000 or less. There’s also no clear picture of what happens to law enforcement, which gets a huge portion of its funding from property taxes, prompting some to liken the measure to “defunding the police.”

“The governor and the Legislature own what comes next,” Jeff Brandes, a former Republican state senator who has been a vocal critic of the amendment, wrote on X. “They have the responsibility to manage the fallout.”

Meanwhile, Florida realtors are hoping the measure will sweeten the deal for out-of-state buyers considering a move to low-tax states. The Florida Association of Realtors was the measure’s largest backer, pouring $20 million into a political action committee to convince voters to pass it.

Cities and counties are already looking into other ways to generate funds, such as fire assessment fees and increasing fees for libraries and youth programs, Brandes has said.

Brandes said that DeSantis, who is in his final weeks of his two terms in the governor’s office, “doesn’t have to eat his own cooking.” Republican Byron Donalds, who won the race on Tuesday to succeed DeSantis, supported the measure.

“The amount of things that are unknown here are astronomical,” Brandes said in an earlier interview.

Top photo: Urban Florida. (Photographer: Zak Bennett/Bloomberg)