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Related: Along the Coast: Tax roll grows from previous estimate

By Rich Pollack

Difficult decisions could loom large on the horizon should a proposed state constitutional amendment reducing property taxes for a giant chunk of Florida homeowners be approved by 60% of voters in November.

Yes, local government leaders will have to make tough choices, but the ripple effect of those decisions could mean higher costs for everyone — from business owners and renters to even soccer moms who could face higher league registration fees for their children to participate.

Proponents of the amendment say it will be a blessing for homeowners facing higher insurance costs and other affordability issues. They also see it as reining in local governments, whose budgets they say have been bloated thanks to increasing property values on which the taxes are based.  

At the same time, the proposed amendment is being portrayed by opponents as a potential nightmare for local governments that depend on property tax dollars to provide a variety of services. They say it could also create unwanted costs for businesses and landlords that could be passed on to consumers and renters.

“You’re opening doors for local governments to create other fees and taxes to offset the loss in revenue,” said Jeff Kottkamp, president and CEO of Florida TaxWatch, an organization that is often on the side of keeping taxes reasonable. “It could ultimately lead to no savings at all.” 

The potential savings

Should the amendment pass, homesteaded property owners would see this year's $51,411 homestead exemption — up from $50,722 in 2025 — increase to $150,000 in 2027 and to $250,000 the following year. 

That would be welcome news for homesteaded property owners in the state. Take, for example, a homeowner in Ocean Ridge whose property has a taxable value of about $1 million (see chart). That homeowner pays property taxes not just to the town of Ocean Ridge, but also to Palm Beach County and others including the county’s Children’s Services Council and the Palm Beach County Health Care District — a total of a dozen different property tax assessments. 

Should the amendment pass, that homeowner would likely see a tax saving of almost $1,800 over the two-year period, bringing the total tax bill down from about $18,500 to about $17,900 the first year of the increased exemption and to about $17,300 after the second year. The savings would continue into the future, with increases in the exemption tied to the Consumer Price Index.

For the town of Ocean Ridge, that homeowner’s reductions will translate into a tax revenue loss of $361 from the town the first year and about $725 the second year. 

The challenge for the town, and for most Florida municipalities, will be to figure out how to continue providing services with less revenue if the exemptions are increased. 

That, says Charles Chapman, a legislative advocate for the Florida League of Cities, is likely to cause a shift in footing the bill, with those without a homestead exemption being on the front lines. 

“If you reduce the number of people paying, those that remain pay a higher percentage of the taxes,” he said.

Limited options

Delray Beach City Manager Terrence Moore agrees with the idea that there are really just three options available to the local governments. 

Elected officials could raise the property tax rate, called the millage; they could increase fees, or they could reduce services. They could do any combination of those or all three. The goal, Moore said, is to strike a balance between revenue generation and reduced expenses. 

Factor in the “pebble in the pond” effect, opponents of the amendment say, and negative impacts of the local government actions could be widespread. 

Chapman uses the example of his child’s soccer league to illustrate the point. The league pays the city to lease the playing field. If the city raises the cost of the agreement, the league may possibly raise the registration fees to a point where Chapman may have to decide whether to enroll his child in just two of the league’s three sessions. 

With the potential for large revenue cuts a reality, cities are already looking for ways to trim expenses, but where to cut could be a challenge politically, as could the idea of raising the tax rate to generate revenue. 

Highland Beach Town Manager Marshall Labadie points out that governments may be forced to be less responsive to the wishes of their constituents if the money isn’t there. “It’s difficult for elected officials to not spend money on services residents are demanding,” he said. “It’s challenging.” 

Public safety is one area where residents often demand the best service possible. An earlier version of the proposed amendment made it difficult for governments to reduce public safety funding, but that language is no longer in the amendment. 

Making cuts to public safety, however, is a choice elected officials typically avoid. 

How tax rate could increase

Local governments and taxing districts can raise their tax rates or millages up to $10 for every $1,000 of taxable value in order to generate additional revenue, but a new law requires a unanimous vote of the governing body to approve the tax rate increase if it is more than 10% higher than the rolled back tax rate, which is the rate that would raise the same amount of taxes as the previous year, except for taxes from new construction. 

A raise in the tax rate would impact most of a municipality’s property owners and could lead businesses to increase prices and landlords to increase rents. The same holds true for special taxing districts, such as the South Florida Water Management District. 

But even non-homesteaded properties will see relief from escalating property taxes. The proposed constitutional amendment would cap the maximum annual assessment increase at 5%, down from the current 10% maximum. 

Politically, elected officials say, raising taxes is never a good idea. 

Those familiar with the amendment say its genesis in part comes as a result of a belief that local governments spent more than they needed to because they were getting more property tax revenue as home values rose.

The amendment stops short of eliminating all property taxes for homesteaded properties — something Gov. Ron DeSantis has supported — but the referendum “requires, through general law, a schedule for full elimination” of those taxes.

Belt-tightening avoided?

TaxWatch’s Kottkamp, a former lieutenant governor and Republican legislator, says that too often governments looked at how much they had to spend and found ways to spend it, rather than figure out how much they needed and come up with the necessary funds. 

“Part of this is their own fault,” he said. “They have hidden behind the increased value and not exercised fiscal constraint.” 

Numbers provided by TaxWatch show that property tax revenue for three of the area’s largest cities grew by more than 100% from 2014 to 2024. 

Boynton Beach saw a 130% increase in property tax revenue. Boca Raton, according to TaxWatch, saw a 120% increase in tax revenue, while Delray Beach saw a 106% increase. The study does not include smaller towns in the coastal Palm Beach County area. 

State Rep. Peggy Gossett-Seidman, R-Highland Beach, a former town commissioner, says that some of the funds the local governments received could have been put into reserves, used to pay debt or used to reduce taxes. 

Gossett-Seidman, who voted to put the proposed amendment before voters, said that she has seen examples of wasteful and even illegal spending in communities outside of South Florida while sitting on the statehouse’s Joint Legislative Auditing Committee. 

“There are counties and cities that need to do better,” she said. 

Costs have increased

Highland Beach’s Labadie says that one of the reasons governments are spending more is that their costs have gone up as well. Insurance costs have increased and so have employee costs, especially in public safety.

A quick look on Google showed that starting salaries for police officers in Boca Raton, Delray Beach and Boynton Beach increased dramatically between 2015 and 2025. The Google search showed that Boca Raton’s starting salaries increased from around $48,000-$50,000 to $91,000, while Delray Beach’s starting salaries increased from $40,000-$50,000 to $72,000, and Boynton Beach’s went from $48,241 to $73,632.

Chapman from the League of Cities points out that a fire truck that cost $500,000 to $600,000 in 2019 now costs $1.5 million. 

Is issue ripe for voters?

For its part, the League of Cities believes that a flaw in the proposed amendment is that it applies the same exemption to cities across the board, without taking into consideration the different conditions each faces. 

“Tax revenue is the bread and butter for how municipalities operate,” Chapman said. “It requires an understanding that one size doesn’t fit all.” 

Kottkamp from TaxWatch says that his organization is concerned that more time wasn’t spent on devising a property tax reform plan and believes lawmakers could have waited until 2027 when a constitutionally mandated Taxation and Budget Reform Commission will be meeting. 

“We love to see some property tax relief, but we’d like to see more time,” he said. 

Gossett-Seidman, who counters that legislators have been working on this behind the scenes for more than two years, says she thinks that one of the benefits of the amendment is that it has generated conversations about municipal finances. 

“It nothing else, it has got people talking,” she said. “I’m hoping taxpayers start looking at budgets.” 

What’s happening locally 

Boca Raton — Deputy City Manager and Chief Financial Officer Jim Zervis said the tax revenue loss will be “manageable” for the city. Nonetheless, the city will have to make budget cuts next year if voters approve the amendment.

No significant changes are planned in how the city approaches this year’s budget, though officials have already made $1.27 million in cuts proposed by staff.

Council member Jon Pearlman doesn’t think the city is going far enough this year given the potential for a steep revenue decline on the horizon.

Related: Boca Raton: Proposed property tax rate to remain almost the same

Boynton Beach — City Manager Dan Dugger said the city will have to look at other ways to fund discretionary programs using fees or assessments, or possibly creating special taxing districts like Boca Raton’s Beach and Park District.

He said if the amendment passes, programs that might be difficult to protect include subsidized senior services, neighborhood and social-service assistance, and free community events.

Briny Breezes — Town Manager Bill Thrasher is looking for ways to reduce expenditures, possibly refinancing town loans in hopes of getting lower interest rates, and is seeking other revenue options “if there are any.”  

Delray Beach — City officials are debating what budget strategy makes the most sense this year given November’s referendum and its potential implications. They could keep the property tax rate steady, borrow minimally from reserves and make more than $19 million in cuts — or possibly raise the tax rate, dip heavily into reserves, and reduce the amount of cuts needed to about $5 million. 

“I think there’s an argument to be made that we’re about to get handcuffed,” the city’s chief financial officer, Henry Dachowitz, said of the referendum at a June 9 commission workshop.

“You’re playing a game and you’ve got to look at the rules and do the best you can for the community,” he said. “I think hard times are coming. Taxpayers, when offered the chance to pay less taxes, will generally take it.” 

While officials said the city doesn’t need to make any immediate decisions related to the referendum, they also said they can’t wait until the referendum passes to start planning what to do.

Commissioners discussed creating “municipal services taxing districts” for services like parks and recreation, which would be among the most likely to see deep cuts. The taxing districts, which would require County Commission approval as well, would offset losses in city revenue from the referendum with new taxing districts on property tax bills.

Dachowitz said the city should also begin a major “cost-accounting” to develop what the fees for different services could look like if the commission goes in that direction.

Gulf Stream — Town officials say they aren’t overly concerned about the initial years of a forced property tax cut if it is approved by voters.

The town is facing minimal hits in 2027 and 2028 — the latter year amounting to about 3.9% of the town’s budget — because the average value of Gulf Stream’s 373 homestead properties is about $2.8 million.

“So even with a $250,000 exemption, the other $2.5 million is being taxed and would not be exempt. So that’s kind of our saving grace is having a very large per-property taxable value,” Town Manager Trey Nazzaro said. 

Officials are less certain past 2028, in part because it’s not clear what a “schedule for full elimination” of homesteaded property taxes mentioned in the referendum would look like.

Highland Beach — Town leaders are reviewing their five-year financial plan to see what the future holds for some capital projects. Town Manager Marshall Labadie says the town will be able to weather a new $150,000 homestead exemption with the help of reserves without having to make major cuts but that the second year’s exemption increase to $250,000 may be more of a challenge. 

Lantana — Town Manager Brian Raducci said vacant positions in town are temporarily frozen and may be eliminated through attrition because of the uncertainty around the referendum. 

Major capital initiatives, such as the Lantana Beach Master Plan project, will face re-evaluation as the town shifts to a strict “maintain and replace” infrastructure model if the referendum passes, he said.

Another proactive fiscal measure being proposed is to reduce the maximum merit-based employee salary increase in the new budget from the 5% allowed in the past to a 4% maximum. 

“The projected revenue drop will impact core departments like police, public services, development and the library,” Raducci said, if the referendum passes. “Services, and non-essential services, including park/beach maintenance and all major community events, will face severe reductions or elimination.”

Related: Lantana: Proposed budget includes continuation of capital projects

Manalapan — Town commissioners have been briefed on the amendment and the town will adjust if necessary. Manager Eric Marmer says the town will continue to evaluate its budget and look at additional revenue opportunities and possible savings if needed.

Ocean Ridge — The town is still determining the impact to its finances should the referendum pass, but Vice Mayor Steve Coz thinks it should still be in good shape given the strength of its property values. The town also benefits from having strong reserves, he said.

The town is changing its fee structure to meet new state requirements, including for building permits, so that the fees more accurately reflect the cost of the services being provided.

South Palm Beach — Town Manager Jamie Titcomb says the town is in good shape in the short term, having built up reserves that should allow it to continue funding planned capital improvements.

In the long term, local legislative issues will have to be decided on a case-by-case basis and on available funding. 

A team of reporters contributed to this report.

Q&A on Florida’s property tax referendum 

Q: Would I still owe property taxes if the taxable value of my homestead is less than $250,000 — the amount of the exemption in the second year? 

A: Yes. All property owners with homesteads worth more than $25,000 will continue to pay at least a school tax.

Q: Would my total tax bill go down if my homestead’s assessed value is over $500,000? 

A: More than likely. However, a number of variables could reduce the savings and possibly eliminate them, such as an increase in some of the tax rates you pay.

Q: Can local governments raise their tax rates? 

A: Yes, but for larger increases, a unanimous vote of a municipality’s governing body — or a public referendum — is required. 

Q: Can my city or town charge more for services that offset my tax savings?

A: Yes, governments are allowed to charge fees for a variety of services — including for parking, libraries and recreation programs — and they can also increase fines. 

Q: Why do proponents feel this amendment is necessary? 

A: Many think there has been wasteful spending by local governments as property values increased. They want to limit property tax revenue to core municipal services such as public safety and infrastructure.

Q: Will the assessed value of my property increase?  

A: Most likely. However, the assessed value would still be limited to a maximum 3% increase annually for homesteaded properties. For other properties, the value could only increase a maximum of 5%, which is half the 10% annual increase currently allowed. 

Q: Would nonprofits be impacted? 

A: Yes. Local government funding to nonprofits would likely be cut or reduced. Special taxing districts such as Palm Beach County’s Children’s Services Council, which provides grants to nonprofits, would likely see a significant reduction in funding.