By Merrilee Gasser, The Center Square
In Summary:
A new study by Wichita State University warns that proposed cuts to Florida’s homestead property taxes could result in significant revenue losses for municipalities that rely on the taxes to fund public safety and essential services. Property taxes account for about 43% of municipal general fund revenue and are often the only stable, locally controlled funding source for cities. The study’s release coincides with legislative momentum behind multiple property tax relief proposals that could ultimately go before voters.
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Eliminating or significantly reducing Florida property taxes could “fundamentally destabilize local finance” for municipalities that rely on the revenue, according to a new study released as tax relief legislation moves forward.
Related: Eight property tax relief proposals advance in Florida Legislature amid political divide.
The study, conducted by Wichita State University and released by the Florida League of Cities, a group that lobbies for the state’s municipalities, found that cutting homestead property taxes would likely result in less funding for police and fire departments, public works services, and parks unless other revenue sources are found.
How could this impact Apopka's budget?
For Apopka, a significant reduction or elimination of homestead property taxes would hit the city where it funds day-to-day services: ad valorem revenue is projected in the mid-$30 million range for the upcoming budget year (the tentative FY 2025–26 millage would generate about $34.66 million in property tax revenue). In the city’s own budget explanations, property taxes are described as one of the most significant revenue streams. Public safety spending (police and fire) is among the biggest cost drivers—meaning a sizable rollback would likely force Apopka to either trim staffing and service levels (public safety, public works, parks) or replace the lost revenue through other levers, such as fees, rates, or expanded local revenue authority.
Property taxes make up approximately 43% of municipal general fund revenue and are the only stable, locally controlled revenue sources for Florida cities, the study said.
Fully eliminating homestead property taxes would mean a nearly 38% loss in ad valorem revenue and a 14% drop in general fund revenue, according to the study.
High fixed-dollar exemptions ranging from $250,000 to $500,000 would result in a 25% to 35% revenue loss, the study said.
“Cities of all sizes spend more on public safety than they receive in property tax revenue, meaning even modest losses can create structural gaps,” the study said.
Rural communities likely feel bigger impacts, according to the study. The communities would struggle to find other revenue sources and would face steeper service cuts than larger cities with more diversified bases, the study said.
The study suggested the state could help replace the lost revenue or provide relief that is income-based or senior-focused. It also proposed giving local governments more control over expanding revenue options and providing residents with fiscal-impact disclosures to explain the tradeoffs for lower tax bills.
Four of eight property tax relief proposals recently cleared the House State Affairs Committee. If approved by the full legislature, they would move to an election ballot for voters to consider.
House Joint Resolution 201 would eliminate non-school property taxes for homesteads. House Joint Resolution 205 would do the same for homesteads owned by people age 65 and older. House Joint Resolution 209 would allow for a $100,000 exemption for owners with property insurance, and House Joint Resolution 211 would increase the maximum value of the accrued Save-Our-Homes benefit that can be transferred to a new homestead.
The proposals seek to provide relief for homeowners while maintaining funding for police and schools.
Key Points:
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Property taxes make up approximately 43% of municipal general fund revenue and are the most stable revenue source for Florida cities, according to the study.
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Fully eliminating homestead property taxes could result in a nearly 38% loss in ad valorem revenue and a 14% reduction in general fund revenue.
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Significant fixed-dollar exemptions could reduce municipal revenues by 25% to 35%, potentially forcing cuts to police, fire, public works, and parks.
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Rural communities likely experience greater impacts due to fewer alternative revenue options and a heavier reliance on property taxes.
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Four proposed property tax relief measures have advanced in the Legislature and could appear on a future statewide ballot.
