After nearly two years of waiting, Floridians finally get to see Gov. Ron DeSantis’ official property tax proposal.
It is certainly ambitious.
Start with the positives. Inflation has reduced the value of the current homestead exemption, and raising it to $150,000 in 2027 would help offset that loss. The new exemption also eliminates the unfair two-tier school tax system, treating all homeowners equally on their tax bills.
Commercial property owners would benefit, too, with their cap on assessment increases dropping from 10% to 5%. These are major changes and should be central to any discussion of the proposal.
But there are drawbacks.
The 5% cap still does not apply to school taxes. Commercial properties already pay more than 60% of their tax bills toward school taxes, and that share will only grow as the homestead exemption expands.
There was also an effort to limit how local governments spend property tax money to essential items only. But the list excludes important legal obligations, including constitutional offices, administration and permitting. An even bigger problem is that some terms are not clearly defined, meaning courts could end up deciding what they mean instead of lawmakers.
The biggest attention-getter is the plan to expand the homestead exemption to $250,000 in 2028. It might not be fair to call that a downside. If the goal is to restore the exemption’s impact to the 1934 level, it would need to be closer to $400,000.
The real issue is speed.
Jumping from $50,000 to $250,000 in just two years is a huge leap. Without a clear plan to replace lost revenue in cities and counties with mostly residential property, the proposal could fall short of the 60% voter approval needed. Remember, voters did not even approve a $100,000 exemption in 2018.
A more practical approach would be to phase in the increase, perhaps by $25,000 each year.
The proposal also requires new homesteaders to wait five years before receiving the expanded benefit. Unfortunately, this type of provision has repeatedly been found unconstitutional under Equal Protection. While it should be severable, including it guarantees the amendment will be taken to court and could risk throwing the baby out with the bathwater.
One of the biggest problems is what the proposal does not address, and it could spark a taxpayer revolt in 2027.
Non-ad valorem assessments are flat-fee property taxes that are not based on property value. There are no limits on them. So, if local governments lose 20% to 30% of their regular property tax base, they will likely use these flat fees to make up the difference.
Ironically, many homeowners could end up paying more in taxes in 2027 because of it. Even worse, these assessments do not include the usual exemptions for churches, schools, the blind, widows or disabled veterans. If lawmakers want this plan to work, they need to close this loophole.
With this release, DeSantis has staked out several firm positions. He wants to see the homestead exemption grow to cover most eligible properties, much like the 1934 exemption. By eliminating the two-tier treatment of school taxes, he would bring more fairness to the current system. Additional relief for commercial property is also badly needed.
The Legislature faces an unenviable decision over the next week.
Do lawmakers pass the proposal exactly as written and lay the amendment at the feet of voters, warts and all? Do they overhaul the weak points and take personal authorship of the amendment? Or do they send it back to the Governor for redrafting, risking the clock running out on the 2026 ballot?
Either of the latter choices would put obvious strain on an already rocky relationship between the branches and leave a sizable portion of voters still justifiably demanding reform.
For many legislators, the next few days will undoubtedly be an inflection point. Having faced many such momentous decisions during my time in the House, I can only offer this: When I look back on my time as a representative of the people, I have never regretted voting my conscience.
___
Matt Caldwell is a former Republican state lawmaker and current Lee County Property Appraiser with a background in real estate, agriculture and tax policy.
The post Matt Caldwell: DeSantis’ property tax plan offers promise, but risky gaps remain appeared first on Florida Politics – Campaigns & Elections. Lobbying & Government..