Property tax rates in Escambia County and Pensacola haven’t increased in decades. While elected officials can claim they aren’t raising rates, annual notices are sent each year informing residents their tax bill will be increased.
Amid state leaders’ push to reduce or eliminate property taxes altogether, this year’s “Truth in Millage” notice has created a large outcry among the public over what they argue is a “tax raise.”
The Escambia County Commission public budget hearing earlier this month was met with a packed house as residents voiced anger over property tax rates combined with an actual increase to the county’s fire tax. While officials at the city of Pensacola have taken pains to explain the need to keep the millage rate the same to fund needed pay raises for police and firefighters at its budget hearings, council members have debated whether it should be considered a tax raise or not.
The Escambia County Children’s Trust bucked the trend of other Escambia County government agencies and adopted the “rollback” rate, making it the only local tax authority to legally say it didn’t raise taxes for the upcoming 2025-2026 fiscal year. The Escambia County School Board was the only local government to raise property taxes.
Property tax basics
Local governments raise money from a variety of sources, such as sales taxes, franchise fees, and fees for service, but many of those sources carry restrictions on how they can be spent. Property tax remains local governments’ largest source of unrestricted funds. The taxes are the local government’s main source of revenue to fund things like salaries, benefits for employees, and projects that aren’t eligible for other sources of funding.
Property taxes are a tax on the assessed value of property and have been around in the United States since the establishment of the Massachusetts Bay Colony in 1634. Local governments set rates for taxing each property in a unit of measurement known as a mill. Each mill will tax a property owner $1 for every $1,000 of property, and the rate is known as a millage rate. So, a property owner with land worth $100,000 taxed at a millage rate of 10 mills would pay $1,000 in property taxes.
While local governments set the rate, it’s the Escambia County Property Appraiser who assesses the value for each piece of property. State law dictates how a property appraiser can value the land. For example, properties with homestead exemptions, where the property is also the primary residence of the owner, get the “Save Our Homes Benefit” that limits how much the assessed value of the home can increase by 3% or the rate of inflation, whichever is lower. There are other benefits, too, under state tax law that can lower the taxable value of a home even more.
Florida Truth in Millage
Florida’s Truth in Millage law requires local governments to give property owners direct notice via mail about making any increases to property taxes. The law considers any millage rate that produces more total revenue than the previous year to be an increase in property tax, even if the millage rate remains the same or is reduced.
The only way local governments can get out of not having to call a rate change a tax increase is if the rate is reduced enough to bring in the same amount of revenue or less than the previous year. This rate is called the “rollback rate.”
This fact has always caused a lot of consternation with local officials. Whether or not they’re saddled with labeling a tax increase is largely dependent on the housing market and not the thing they control, which is the millage rate. If there’s a hot housing market, with lots of existing home sales, local governments will see a revenue boost thanks to property assessments being freed of the 3% cap for that tax year because it has new owners.
How much are taxes going up?
The only actual property tax increase approved this year came from the Escambia County School Board. The School Board voted 4-1 last month to raise the millage rates for its capital outlay budget by 1.5 mills, though the effective rate only increased by 0.512 mills over previous years because part of the school’s millage rate is determined by state funding levels.
Exactly how much taxes will increase depends on the value of the property and the owner’s individual tax situation, but a homeowner in Escambia County who has owned their home for at least a few years can expect to see an effective 7.6% increase in their property tax bill compared to the previous year, most of that increase is because of the school board’s tax rate increase.
For example, a homestead property in unincorporated Escambia County may have a market value of $280,000 and hasn’t changed hands for several years, but may only have an assessed value of $190,000 thanks to the 3% cap on increases. When homestead exemptions are applied to that value, the property owner may find that their tax bill will go from about $1,860 in 2025 to about $2,000 in 2026.
If that same home has been sold in the previous year, the home can be assessed at the current market rate of $280,000, and even with homestead exemptions applied, the property could see a tax bill of about $3,100, whereas the previous year, under different owners, it only generated $1,860 for the county.
Who pays the most tax?
The property tax advising firm Ownwell has published data that found the median property tax bill in Escambia County is about $1,398, though the median bill can vary widely depending on location, as it $705 at the north end of the county and $2,253 in downtown Pensacola.
Data published on the Escambia County Tax Collector’s website shows 13% of all property taxes collected in 2024 were paid by the top 25 property owners, with Florida Power and Light topping the list at $26.3 million paid in property tax on land valued at more than $2 billion. Navy Federal Credit Union is in the second position on the list with a tax bill of $3.9 million on land valued at $526.1 million.
Property owners in unincorporated Escambia County pay the lowest property tax rate at 12.9336 mills in 2025, and that will increase to 13.411 mills in 2026. While property owners in downtown Pensacola pay the highest rate at 18.5381 mills in 2025, that rate will increase to 19.3856 mills in 2026.
This article originally appeared on Pensacola News Journal: Property taxes fund everything from sidewalks to fire and police, but how do they work?
Reporting by Jim Little, Pensacola News Journal / Pensacola News Journal
USA TODAY Network via Reuters Connect
