Politics
Jarah Jacquay: Florida Realtors is right about the problem — and wrong about Amendment 3
I work in Florida real estate. I want homeownership to be attainable, property taxes to be reasonable, and families to be able to remain in the homes and communities they have worked to build.
That is precisely why I am uncomfortable with Florida Realtors’ campaign for Amendment 3.
The association’s argument is appealingly simple: costs are rising, property taxes are part of those costs, so cutting property taxes will make Florida more affordable.
Its campaign promises to “Lower Your Property Taxes,” “Make Homeownership More Affordable,” and “Keep Money In YOUR Pocket!”
Those are good political slogans. They are not yet a fiscal policy.
Amendment 3 would increase the homestead exemption for non-school property taxes to $150,000 in 2027 and $250,000 in 2028, with inflation adjustments beginning in 2029. It would also cut the annual assessment-growth cap on non-homestead property from 10% to 5% and require the Legislature to create a uniform procedure allowing counties and municipalities to increase homestead exemptions still further, potentially to a home’s full assessed value.
The question is not whether lower taxes are desirable in the abstract. The question is whether a statewide constitutional formula is a sensible way to govern a major part of local finance in one of the largest, fastest-growing and most economically diverse states in America.
I do not think it is.
Florida is not one housing market — or one community
Pensacola is not Miami. Miami is not Ocala. Orlando is not Tallahassee. A rapidly growing suburban county facing major road, stormwater and public-safety needs does not occupy the same fiscal position as a small rural county with slow growth. An older coastal municipality maintaining aging infrastructure has different needs from a newly incorporated community.
Florida’s constitutional tradition of home rule recognizes that reality. Many public questions are best answered closest to the citizens who bear both the benefits and the costs.
Yet Florida Realtors’ own campaign acknowledges the central problem with its statewide solution. Asked about local-government budgets, the campaign concedes that “the impact will vary by community” and that each city and county will have to evaluate its own budget and priorities. It then argues that uncertainty about those decisions should not prevent the state from acting.
That strikes me as exactly backward.
If the fiscal impact varies substantially by community, that is an argument for preserving meaningful local discretion, not for placing a substantially more restrictive statewide tax structure in the Constitution.
A constitution should establish durable rules of government. It should be approached cautiously when asked to function as a tax code.
Cutting a revenue source does not eliminate the cost of government
There is another uncomfortable fact largely missing from the “money back in your pocket” framing: public services do not become cheaper because we change the taxable value appearing on a TRIM notice.
Roads still deteriorate. Stormwater still has to drain. Firefighters, deputies and paramedics still have to show up. Pension obligations still have to be honored. Bonds still have to be paid.
The Florida Legislature’s Revenue Estimating Conference projects that Amendment 3 would reduce local non-school property-tax revenue by about $4.95 billion in fiscal year 2027-28, nearly $8.8 billion in 2028-29 and roughly $11.9 billion annually by 2031-32.
That does not mean governments are entitled to every dollar they currently collect. Nor does it mean every local program deserves preservation. The government should be continually forced to justify its expenditures.
But arithmetic remains arithmetic.
If we reduce one major revenue source without reducing the underlying cost of services, some combination of things must happen: expenditures fall, millage rates change within remaining legal limits, fees or special assessments rise, infrastructure is deferred, another taxpayer bears more of the burden, or another level of government supplies the money.
Those may sometimes be good choices. They should simply be made openly.
The troubling feature of Amendment 3 is that it offers voters the pleasant half of the transaction — your tax bill goes down — while leaving hundreds of local governments to reconcile the other half afterward.
There is also a problem with the economics
Florida Realtors’ argument appears to assume that reducing recurring property-tax liability translates fairly directly into improved housing affordability.
That is not necessarily how housing markets work.
Assessment caps can create substantial disparities between otherwise similar properties based simply on when they were purchased. The Lincoln Institute of Land Policy has documented how assessment limits can generally favor longtime owners over newer purchasers, discourage mobility, and shift tax burdens among taxpayers. In Florida, the effect is familiar: two similar homes can carry very different tax bills because one owner has accumulated years of capped assessment growth, while the newer purchaser resets at a value closer to market value.
Amendment 3 would not unwind that model. Lowering the non-homestead assessment cap from 10% to 5% would expand the reach of assessment limitation.
Even more relevant to an organization devoted to housing affordability, a study published in August in Real Estate Economics examined Florida’s existing property-tax system and found consistent evidence that expected tax savings associated with accumulated and transferable tax benefits are capitalized into transaction prices. In plain English: buyers may bid some of tomorrow’s tax savings into today’s purchase price.
The study does not estimate Amendment 3’s effects. But its finding should make policymakers cautious about assuming that a reduction in recurring ownership costs translates dollar-for-dollar into improved purchase affordability. The researchers themselves conclude that policies intended to reduce ongoing ownership costs may unintentionally worsen housing affordability by inflating home prices.
That deserves serious attention from Realtors.
A policy that further privileges established ownership, strengthens assessment limits and may cause some tax benefits to be capitalized into prices can benefit particular property owners. But calling that simply “housing affordability” skips several steps in the economic analysis.
Benefits and costs belong in the same conversation
There is a famous warning about democratic government, often attributed (probably mistakenly) to the Scottish historian Alexander Fraser Tytler, that “democracy becomes endangered when citizens discover they can vote themselves largesse from the public treasury.” While the original provenance of the quote might be in dispute, the underlying warning is timeless and captures a real problem: self-government becomes less responsible when citizens are encouraged to consider public benefits and public costs as separate questions.
At the federal level, we have spent decades doing exactly that.
The Congressional Budget Office projects a federal deficit of $1.9 trillion in 2026, with public debt at 101% of GDP. Net interest costs are projected at about $1 trillion this year and $2.1 trillion by 2036. Persistent borrowing allows the national government to shift part of the cost of present choices into future budgets, placing claims on tax revenues that will be collected from people who had no voice in making many of those choices.
Florida’s local governments operate under a very different set of constraints. State law requires counties to adopt balanced budgets, and municipalities must likewise match available revenues and other resources to appropriations and reserves. They cannot create money, and they cannot routinely finance operating shortfalls the way the federal government can through persistent deficit borrowing.
That constraint is a feature, not a bug.
Local fiscal accountability works best when citizens can see the relationship between the services they demand and the taxes required to provide them. A statewide constitutional amendment that weakens part of that relationship may produce “tax relief,” but it does not eliminate the underlying tradeoff.
There are better ways to pursue relief
None of this is an argument for complacency.
Florida’s housing costs are genuinely punishing. Property taxes matter. So do homeowners insurance premiums, mortgage rates, land and construction costs, infrastructure constraints, regulatory barriers, labor costs, household incomes, and supply shortages in rapidly growing markets.
The response should be correspondingly sophisticated.
Florida can strengthen targeted relief for households facing unusually high property-tax burdens. It can improve deferral options for elderly or fixed-income homeowners. Local governments can reduce millage rates when rapidly appreciating assessments create revenue windfalls. The state can strengthen transparency and truth-in-taxation requirements so elected officials must affirmatively vote for — and explain — real increases in property-tax collections.
And where voters in a particular county or city want a substantially smaller local government and substantially lower property taxes, they should be free to choose it.
That is self-government.
What they should not have to do is make substantially the same fiscal choice for every community in Florida through a constitutional amendment whose consequences will be difficult to reverse if the economics prove different from the campaign promises.
Florida Realtors is correct about the problem. Floridians are being squeezed, and homeownership is becoming harder to attain and sustain. The association is also right to demand serious tax reform.
But tax relief is not synonymous with tax reform, and statewide constitutionalization is not synonymous with fiscal discipline.
An organization devoted to real estate should understand better than most that location matters.
Our tax policy should recognize that too.
___
Jarah V. Jacquay is a Pensacola-based real estate professional and the managing principal of Virtuous Cycle LLC, a community development and PPP advisory firm. The views expressed are his own.
The post Jarah Jacquay: Florida Realtors is right about the problem — and wrong about Amendment 3 appeared first on Florida Politics – Campaigns & Elections. Lobbying & Government..