Florida Policy Institute warns proposed homestead exemption changes will cost billions

Gov. Ron DeSantis’s Special Legislative Session he called for this week to address Florida’s property taxes could be wildly costly to local governments and school districts., according to a think tank analysis.

The Florida Policy Institute (FPI) published a report heading into the Special Session that runs to Wednesday in Tallahassee and the group projects if DeSantis gets his way, the plan will cost billions of dollars to fund government services for municipalities. DeSantis is asking lawmakers to approve raising the homestead exemption limit to $1500,000 beginning Jan. 1 and hiking that to $250,000 in 2028. Eventually it would eliminate the exemption entirely, according to a proposed Senate joint resolution (SJR 2-F).

The impact on school districts alone would be in the billions of dollars, according to the analysis by FPI, a self-proclaimed non-partisan, independent research organization.

“The resolution’s $250,000 homestead exemption alone would cost school districts an average of $5 billion annually — the revenue loss would increase to $8.59 billion annually if lawmakers eliminate homestead property taxes by (fiscal year) 2030-31,” the FPI report concluded.

But schools alone are not the only local government functions that would see a loss in substantial revenue. The FPI report said costs to county coffers in general could be extreme.

“Under the resolution’s $250,000 homestead exemption, counties would lose an average of $4.8 billion annually, which could increase to $8.65 billion with full homestead elimination by FY 2030-31,” the analysis projected.

The Special Session is by no means a slam dunk for DeSantis for the measure under consideration by legislators. It will take 60% of the vote by both Senate and the House members to get approval.

And the state is countering criticism of the proposal with a special “Save Our Homes” website – created by the state – to show individual homeowners how much they’d save on their property tax bills if the proposals get clearance by legislators. Permanent residents can enter their addresses on the website and see what  homestead exemptions change financially under the measure.

People who move to Florida after the amendment passes would have to pay homestead taxes for five years, DeSantis said, a backstop that is intended to “mitigate” undue benefits for newcomers.

___

A.G. Gancarski of Florida Politics contributed to this report.