Gov. Ron DeSantis has questioned whether Floridians should continue paying “perpetual rent” to the government on property they already own. A new Florida TaxWatch report presents five reform options that could reshape how local governments fund law enforcement, fire services, education, sanitation, and other essential services.
The Challenge
Property taxes generated $55 billion for Florida’s local governments in 2024, with homeowners contributing $19 billion of that total, approximately 34%.
Property tax payments account for 63% of Escambia County’s general fund and approximately half of its major revenue sources. The City of Pensacola is less reliant on property taxes than the county, but it still relies on them for 35% of its general funds and approximately 8.5% of its total budget.
According to Florida TaxWatch, the rapid growth in property tax revenue statewide has been driven primarily by rising property values rather than new construction. However, Escambia County Property Appraiser Bubba Peters told us in May that the majority of Escambia County’s property value increases have been due to new construction.
- Peters also noted the economics of supply and demand. “The market values have also increased fairly rapidly since COVID. Florida was one of the states that many people moved to during COVID, especially during the remote working atmosphere.”
He continued, “We have been steadily trying to keep up with that growth from a building standpoint. As you don’t have the amount of units needed to supply housing, it’s going to naturally increase the values. It’s supply and demand.”
Florida TaxWatch analyzed the issue and explored five reform options, ranging from the complete elimination of property taxes for homeowners to more immediate statutory changes aimed at increasing transparency and accountability.
Five Options
Option 1: Phased Elimination Over Time. The most comprehensive approach would gradually eliminate property taxes for all Florida homestead properties over either 10 or 30 years. This would work by freezing assessed values at current levels and incrementally increasing exemption percentages each year. Under a 10-year plan, homeowners would see immediate savings of $1 billion in year two, with complete elimination by year ten. The 30-year version provides smaller but steady annual reductions of $655 million. This measured approach allows local governments time to plan for the revenue loss while maintaining critical services.
Option 2: Senior-First Approach Recognizing that Florida has one of the nation’s highest senior populations at 22.7%, this option would prioritize elderly homeowners living on fixed incomes. Seniors aged 65 and older who have claimed homestead for the required number of years would receive immediate full exemption, while others work through the standard phase-out period. This could eliminate approximately $3.6 billion in property tax revenue immediately while providing targeted relief to those most financially vulnerable.
Option 3: Preserve School Funding. This compromise maintains all school-related property taxes while eliminating other local government levies. Since school taxes generate $21.5 billion statewide, with $7 billion coming from homestead properties, this approach preserves education funding while reducing homeowner burden by an estimated $12 billion. This option avoids complex revisions to school funding formulas while still providing substantial relief.
Option 4: Percentage-Based Reduction. Rather than elimination, this approach would provide guaranteed tax reductions by giving each property a set percentage reduction of the previous year’s assessed value while freezing millage rates. A 20% exemption would save homeowners $3.8 billion annually if applied only to homesteads, or $11 billion if applied to all properties. This creates predictable savings that local governments cannot erode through rate increases.
Option 5: Immediate Transparency Measures. The only option not requiring a constitutional amendment, these statutory changes could be implemented in the 2026 legislative session. Key provisions include making the rolled-back millage rate the default (forcing governments to justify increases rather than assume automatic growth), strengthening Truth in Millage notices to show total revenue impacts of rate changes, and establishing minimum service standards to help taxpayers evaluate whether tax levels correspond to service quality.
Implementation Considerations
Any significant reduction in property taxes faces substantial challenges. Local governments require time to adjust their budgets and explore alternative revenue sources.
- Florida’s 29 fiscally constrained counties would need special consideration, possibly including state appropriations to offset revenue losses. Florida Statute 218.67 defines fiscally constrained counties as those that meet one of two criteria: they are entirely within a rural area of opportunity as designated by the Governor, or they are counties for which the value of a mill will raise no more than $5 million in revenue.
Whatever option ultimately advances, it will require a constitutional amendment approved by 60% of voters for the first four options, giving Floridians the final say on redefining property ownership in their state.
Read the full report.
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