Orange County Commissioners worry about property tax plan’s impact

Orange County officials say the county will be hit with a $430 million loss over two years if voters approve a November referendum to raise the homestead exemption for property taxes.

In Year 1, that would include an $85 million decrease for the countywide millage in addition to a $46 million loss for the fire tax and a $29 million cut for the Orange County Sheriff’s Office.

The numbers would increase in Year 2 to $154 million from the countywide general fund, $71 million from fire services and $45 million from law enforcement.

Orange County Commissioners discussed the situation and the potential effects as the Legislature voted to put the property tax question on the ballot following a two-day Special Session this week. The constitutional amendment would lift homestead exemptions for those who own primary residences in the state by the end of this year to $150,000 in 2027 and $250,000 in 2028

“This is absolutely alarming,” Commissioner Nicole Wilson said. “Our legislators for all these decisions they make, they have to go home somewhere. And I can’t imagine that they also are OK with a volunteer public works department.”

Orange County Budget Director Kurt Peterson warned that the county’s bond rating could be affected if rating agencies get spooked.

Another question: What happens if Orange County’s smaller cities dissolve under bankruptcy from the declining revenue?

“If those smaller cities were not able to function, then we as a county would have to then start providing the services that weren’t provided by those smaller cities, correct?” Commissioner Michael Scott asked.

“That’s an unknown,” Peterson answered. “In theory, yes, the county would have to figure out how it’s going to cover the core services that are needed from the residents.”

“I can think of two, maybe three cities that have challenges,” Scott responded.

Florida Politics has reached out to Scott’s Office to ask which cities he was talking about.

No budget conference has been held to study the effects of the state’s ballot initiative, and Gov. Ron DeSantis vetoed funding for a study last year. That means the fiscal consequences are unknown.

For the measure to pass, 60% of voters in November must support the plan.

School taxes are exempt under the proposal, due to the Legislature’s amendment that changed DeSantis’ plan.

“When you look at your property tax bill, typically the school levies are about 40% … of what residents pay for homestead properties,” Peterson said.

Orange County uses the general fund to pay for items like the SunRail light rail, the Lynx bus service, mental health and homeless initiatives, the Medical Examiner’s Office, Animal Service, cultural arts, planning/zoning, and more.

“I have received so many emails from all of our legislators here in the central core, on both sides, glorifying all the things they’ve got funded,” Commissioner Mayra Uribe said. “Lots of art projects, water projects, environmental projects, nonprofit projects, but you’re gutting all of this.”

Commissioner Kelly Martinez Semrad worried how the property tax changes could devastate the region’s economy if more people are using government services without paying taxes for them.

“When the system tips the scale where you have more free riders than contributors, the economy collapses,” Semrad said.

She urged the county to be vocal about what is at stake ahead of the November election.

“We have a heavy lift to educate a lot of people on the impacts,” Semrad said. “We have a fight ahead of us.”