Storms are unpredictable. They can be moderate, leaving our homes untouched, or they can be deadly, leaving monumental damage in their wake. The storm we’re facing this year has less to do with hurricanes and more to do with property taxes and tax relief.
About a month ago, we started talking about the amendment to the Florida Constitution increasing the homestead tax exemption. To be clear, Florida currently has a property tax assessment exemption in the amount of $50,000 for homesteaded properties. The November vote will be to increase the exemption for homesteaded properties to $150,000 for the first year and $250,000 for the second year, with the expectation of future increases. If this amendment passes, Florida would have the largest property tax exemption in the United States, according to the Tax Foundation. Keep in mind, Florida is now the third-largest state in population in the country, so increasing the property tax exemption will still leave a lot of revenue in the coffers of local government, just not as much.
We’re now just starting to hear the county commissioners rattle the cages about what services will need to be cut, and you can anticipate more media visibility between now and Election Day. Pretty much every Florida county is looking for ways to decrease county spending. They’re looking at freezing hiring; cutting travel; canceling or reducing capital projects; cutting services like parks and beaches, fire response and EMS programs; and increasing fees and other taxes to offset the loss of income.
In other words, this would be a historic change to a primary revenue source for local governments. According to the Florida Office of Economic and Demographic Research, if passed, the amendment would reduce property tax revenue in the state by almost $5 billion in the first year. There are even discussions among county commissioners and city commissioners about combining services like fire and police. This won’t sit well with the local populations and local governments that will lose their autonomy.
Since there are always good and bad ways to look at monumental change, how do you think potential new residents of Florida will view this amendment if it passes in November? Florida is already an advantageous state to relocate to relative to taxes, and if passed, this could take the edge off the increases we have had in insurance, property maintenance and construction.
If passed, this amendment will likely draw more residents to the state, which will increase tax revenue even if the homestead exemptions are higher. I’m not suggesting this is the reason to vote for the amendment, but you can be sure everyone in state and local government in Florida has considered this possibility.
Florida is growing in population rapidly, and with that comes all of the growing pains associated with growth. We’re not that state where you can retire in sunshine for very low living expenses anymore; Florida is a victim of its success. So, stay aware of what your county commissioners are proposing in the event of the amendment passing. Tightening your belts isn’t always a bad thing, especially with an oncoming storm.
