PANAMA CITY — While homeowners may be chomping at the bit for the anticipated property tax amendment, it’s set to have a significant impact on local budgets.
In the state of Florida, homeowners can claim a homestead exemption on their primary residence. By default, $50,000 of the home’s value goes untaxed.
The current amendment under the name “Save our Homes from Excessive Property Taxes” goes to Florida ballots this fall. The homestead exemption would be raised to $150,000 in 2027, then to $250,000 in 2028.
Exemptions would only apply to non-school taxes, primarily counties and cities.
While homeowners may be jumping for joy, policy analysts are expressing concerns about local impacts.
“If the resolution passes, it would adversely impact counties, school districts, municipalities and special districts like Children’s Services Councils and Hospital Districts,” wrote Esteban Santis in an article published by the Florida Policy Institute. “To offset the revenue loss, localities would have to increase taxes and fees and/or make budget cuts, effectively leading to a cost shift as Floridians either pay more for or lose vital public services.”
According to the Florida Legislature Office of Economic and Demographic Research, between 35.7% and 55% of parcels in Bay County are homesteaded with an assessed value of below $250,000. If the amendment passes, these parcels would effectively be paying no property taxes to local municipalities by 2028.
Just how much of an impact could the reforms have? Here’s a look at data provided by the Bay County Property Appraiser.
Data
In the long haul, governments across the county would lose $38,153,997 a year if the amendment is approved by Florida voters.
Rubber meets the road
Panama City is already facing the looming shortfall head-on. The City Commission held a budget workshop on June 11, where they discussed the anticipated $3,826,011 shortfall.
“The public needs to know how bad this is going to be,” Mayor Allan Branch said during the meeting. “We need to have these hard conversations in preparation and target this really aggressive number.”
Branch was referring to the exercise of the workshop, which included strategizing for a lofty budget reduction between $2.5 million and $4.5 million.
The News Herald followed up with Branch, who later took a begrudgingly optimistic outlook on the situation.
“(Creativity) is always born in constraint,” Branch said. “It is forcing us to have conversations that are long overdue.”
The mayor alluded to Bay County being one of the first in the state to publicly take on the challenges the amendment could create and spoke about potentially collaborating with neighboring cities on services that might be redundant.
During the June 11 workshop, Commissioner Josh Street chimed in on a discussion of public safety consolidation with the county. He said that elected officials across the state are facing the same struggle of taking uncomfortable measures to keep their budgets afloat.
The meeting was tense, with Police Chief Mark Smith speaking out against potential consolidation or cuts to his department. While Panama City might be where these conversations are starting, cities throughout Bay County and Florida are likely soon to follow.
This article originally appeared on The News Herald: Bay County could lose $38 million under property tax plan
Reporting by Dylan Gentile, Panama City News Herald / The News Herald
USA TODAY Network via Reuters Connect
By Dylan Gentile, Panama City News Herald | USA TODAY Network
