Florida cities and counties are working through the effects of Amendment 3 after voters approved the constitutional amendment that’s intended to provide property tax relief to qualifying homeowners with 62% support. Municipalities are discussing spending cuts, adding fees, or a combination of the two to make up for the property tax revenue they could lose.
Amendment 3 changes how much of a primary residence’s assessed value can be exempt from certain property taxes. The homestead exemption increases from $50,000 to $150,000 in 2027 and $250,000 in 2028. Some qualifying homeowners will see their property tax bills decrease as a result. Sanford is among the cities evaluating how to respond to the potential revenue loss. Property tax revenue accounts for about55% of Sanford’s $85.6 million dollar general fund budget. That money helps pay for police and fire services, public works and infrastructure like road maintenance and storm systems, as well as parks and recreation upkeep and operation. At a work session on Monday, the city commission talked about what to do when that revenue changes. They discussed potential cuts to the budget as well as the possibility of a new fire assessment fee to help pay for fire services. Commissioners have not decided on whether to impose that fee but agreed to study the potential costs and benefits.
Sanford is not alone in weighing those types of decisions. At the Orlando City Council meeting Monday, Mayor Buddy Dyer discussed steps they’re taking now, ahead of the amendment’s implementation next year.
"That includes a hold on adding new positions across all departments except for public safety, as well as creating a budget stabilization fund where we have set aside a portion of this year's fiscal savings," Dyer said. "We are going to be very efficient, but I can tell you efficiency alone will not offset the major reductions that we are going to see."
Before the amendment passed, Orlando officials had warned projected revenue would fall short of what’s needed to maintain current levels of service.
In Oviedo, Mayor Megan Sladeck polled the community to get a sense of what residents want to see happen. After Amendment 3 passed, she posted an informal poll asking residents how the city should respond, with spending cuts or new fees.
"Everyone says, 'Cut the fat.' Well, that's what people have been saying forever. I need specifics," Sladeck said. "Like all of us in government, we need you to tell us what counts as fat to you, because what counts as fat to one person counts as meat to somebody else, and it's a very difficult thing."
Instead of changing the budget from the previous year, Sladek would like to start from scratch and ask residents what kind of city they want.
“I think we need to throw it away and build back from nothing, which is going to be substantially more difficult,” she said.
Local governments also have the option of adjusting their property tax rates, known as millage rates, to generate additional revenue. Florida’s Constitution caps how high certain governments can set that rate.
“Until we exhaust every possible opportunity to downsize government and decrease services to just what is essential, I will not support creating new fees or raising the tax rate,” Sladek said.
Questions on how to spend property tax revenue
Finding another source of revenue could help cover the budget gap, but there’s another part of Amendment 3 that’s important for local governments. Questions remain about how they will be able to spend property tax revenue.
Michael Bramson, president of the Brevard County Firefighters Union Local 2969, said he is concerned about how the state could implement additional restrictions on local governments' ability to collect revenue.
“Where we're going to find an issue is not necessarily Amendment 3 as it passed,” he said. “But moving forward, the conversation that the state can then further impose restrictions on local governments' ability to collect revenue funding sources through assessments is crippling. It's paralyzing to our ability to perform job functions.”
Bramson said he is concerned that additional state restrictions on Brevard County’s existing fire assessment fee could limit their ability to maintain fire services.
Amendment 3 limits how local governments can spend property tax revenue, allowing it to be used for specific purposes including public safety. It does not require a minimum level of funding for police, fire, or emergency services.
The state will have a role in determining how property tax relief is put into practice. The day after voters approved Amendment 3, Gov. Ron DeSantis announced plans to call a special legislative session. He says lawmakers will need to work out the details of implementing the tax changes, including how to make sure local governments don’t find other ways to offset the tax relief homeowners just approved.
