The Florida Legislature has voted to give voters the chance to blow up their local governments’ funding.
Sure, it’s always tempting to blow up your local government, but the alternative — depending on the Florida Legislature for your local needs — certainly has its own problems.
The proposed constitutional amendment just passed by the Legislature would exempt the first $150,000 of home property value from property taxes in 2027, rising to $250,000 in 2028. The current homestead exemption now stands at about $50,000 ($25,000 for school taxes). Plus, there’s a mechanism included to allow bigger exemptions after that.
As of last year, about 47% of Florida properties enjoyed a homestead exemption. The average estimated just-value of a home was $337,907.
According to the Legislature’s staff analysis, this would mean $4.6 billion less for Florida local governments in the first year and $8.4 billion less in the second year. (Volusia County estimates its revenues would be cut by $93 million in the second year. Flagler County: $60 million.)
Oh good, you might think. Less wasteful local spending. Maybe. More likely, local governments will close libraries, put off hiring more police, let roads decay and depend on the legislature to fund any local flood control. And forget about that park purchase.
People say they don’t trust government, yet when tax cuts are proposed, they also like to imagine that spending they disapprove of will prudently go on the chopping block first. They live the cut-the-fat dream of painless budget reduction. Good luck with that.
This all will go before the voters in the November general election where it will take a 60% yes vote to go into the state constitution.
The original version of the amendment also blew up public school funding. Public schools are receiving almost $22 billion in property tax revenue this fiscal year. It would take magic or a breathtaking increase in sales taxes to make up a difference like this. So to make this amendment less destructive, legislators chose not to apply the proposed big homestead exemptions to education.
Well, at least that was something.
The original version of the amendment also included limitations on how local governments could spend the remaining property taxes. Only the listed core functions of government could be funded. It was quickly realized, however, that a lot of core functions were left off the list: holding elections, mosquito control, libraries, even the offices administering homestead property taxes. Big omissions.
Because it’s so hard to come up with a complete list of everything local governments need to do — and are mandated to do by the Legislature — the allowed spending has been broadened. And how. Now local governments are limited to spending on “expenditures approved by such county officers or county or municipal governing bodies, except those expenditures prohibited by general law.”
In other words, the locals can only spend money on things that are not illegal. The kind of limit most governments can live with.
Another provision would authorize the Legislature to increase the homestead exemption even more in the future without needing to do it by constitutional amendment. The intention being that this round of defunding local government would just be for starters.
Yet another provision would require supermajorities if a local government wants to set property taxes above the rolled-back rate. That’s the tax rate that would raise the same amount as the year before not counting new construction and annexations.
In sum, a lot of constraints on local government, yet way fewer than in Gov. Ron DeSantis’ original plan. Nonetheless, this is still move-fast-and-break-things fiscal policy.
To be sure, local property taxes do have built-in inequities that need attention. As a longtime homeowner with Save Our Homes protection, I pay modest taxes that go up by tens of dollars a year. (My windstorm insurance, by contrast, is more than twice what I pay in taxes and still rocketing.) New homeowners, however, tell a very different story. They face real sticker shock in the first years. Overall, though, Florida property taxes fall in the middle of what states charge. We remain a proudly low-tax state.
And every year, residents line up at city halls and county commission chambers to complain about tax rates or demand better services and maintenance. Usually both. By shifting fiscal decision-making to Tallahassee, these local decisions will be made behind closed doors in a faraway state capital. Good luck getting heard.
Like any tax cut, this has a good chance of passing. A major fiscal crunch? That comes later. And the average legislator likes to live in the sunny present. We’ll see if the voters do, too.
Mark Lane is a News-Journal columnist. His email is mlanewrites@gmail.com.
This article originally appeared on The Daytona Beach News-Journal: DeSantis’ move-fast-and-break-things tax plan makes November ballot
Reporting by Mark Lane, Special to The News-Journal / The Daytona Beach News-Journal
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By Mark Lane, Special to The News-Journal | USA TODAY Network
