Q&A of the Day – Will the State Legislature Vote to End Property Taxes in Florida?
Each day I feature a listener question sent by one of these methods.
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Today’s Entry: @brianmuddradio How serious is the removal of property tax in Florida? I heard the report that it will cause retail taxes to double if not more, did that report take into account the extra gov. income that will come from all the extra discretionary income from property owners?
Bottom Line: It was just over two weeks ago that I addressed this topic following Governor DeSantis’s expressed support for an end for property taxes with a post on X. While many considered DeSantis’s post to potentially be fleeting, in his State of the State Address on Tuesday he made it clear that he was and is serious about ending property taxes in Florida. In the words of the governor: Escalating assessments have created a gusher of revenue for local governments—and many in Florida have seen their budgets increase far beyond the growth in population. Taxpayers need relief. You buy a home, pay off a mortgage—and yet you still have to write a check to the government every year just to live on your own property? Is the property yours or are you just renting from the government? I know members of the Legislature are studying the issue in anticipation of formulating a proposal to place on the 2026 ballot to provide constitutional protections for Florida property owners. Please know you have my support. Shortly thereafter a related bill was filed in the state senate by Republican Jonathan Martin as the formal session got underway.The bill is entitled: Study on the Elimination of Property Taxes. The straightforward two-page bill states this:
- The Office of Economic and Demographic Research shall conduct a study to establish a framework to eliminate property taxes and to replace property tax revenues through budget reductions, sales-based consumption taxes, and locally determined consumption taxes authorized by the Legislature.
If passed in the state session, the Act would take effect July 1st and would mandate that the study called for by the bill must be completed by October 1st of this year. That would provide the opportunity for the legislature to craft legislation for a proposed amendment that could be taken up in next year’s state legislative session that gets underway in January. Doing so would provide an opportunity for the legislature to place the proposal on voter's ballots in the 2026 midterm elections.
In my previous story I included an analysis that addresses today’s question and that also is likely to be similar to what will be determined in a study by the state should the current senate proposal become law. Here’s a refresh:
If Florida were to pursue an end to property taxation, it would have to come through a proposed constitutional amendment. As DeSantis noted, property taxes are assessed locally and collected locally with most of the revenue collected going to local taxing authorities. Those taxing authorities include school districts, law enforcement agencies, fire districts, roads, waste and recycling programs and operating expenses for county and municipal governments.
Palm Beach County has a total of 77 taxing authorities and 11 special tax districts that currently receive property tax revenue. Obviously, those authorities would be concerned about where they’d get their money. As of now DeSantis hasn’t offered up his thoughts/ recommendations for how that should/would happen. In Palm Beach County alone over $5 billion is collected annually in property taxes.
Florida’s sales tax rate is currently 6%. The average local sales tax rate adds an additional 1% - for a total 7% sales tax rate. An analysis shows that in order for a full revenue offset, sales tax rates would need to effectively double. That would mean likely sales tax rates of between 12% - 14%.
Of course, one of the big questions is whether all of the existing revenue taken in through property taxes really needs to occur. Commonly what we’ve seen with surging property taxes and a strong local economy has been the use of all additional revenue by local governments as opposed to exercising fiscal restraint by reducing mileage rates to offset increases. The wording in the bill for the study is interesting in this regard: locally determined consumption taxes authorized by the Legislature. That could mean multiple things. It could mean that the legislature could limit the types of local consumption/usage taxes that could be levied, or it could mean that in addition to limiting the types of local taxes that can be assessed, limits could be applied as well. That’s currently the case with mileage rates as there are maximum allowable mileage rates.
I’ll continue to follow this issue and implore the state legislature to pass the Act authorizing the study. Even for those opposed to repealing property taxes, there’s no harm in conducting the study that would at least provide important information regarding the feasibility and potential impacts of doing so. We’ll know by the end of this session on May 2nd whether this is an issue that has a chance to be on our ballots next year based on the legislative status of the Act.