Gov. Ron DeSantis has made it clear that abolishing or reducing property taxes is a priority for him during his final two years in office.
The question is, what would replace that revenue for school districts and local governments, including Palm Beach, that rely heavily on property taxes to fund essential services?
DeSantis contends tax relief is overdue for property owners who’ve been hit hard by soaring home values and by increases in government spending triggered by Florida’s explosive population growth.
“While Florida property values have surged in recent years, this has come at a cost to taxpayers squeezed by increasing local government property taxes,” the governor has said.
Real estate prices have peaked, but assessed home values, which are used to determine property tax bills, remain higher than before the Covid-19 pandemic.
DeSantis wants a ballot question in 2026 to give voters the chance to eliminate property taxes altogether.
“That would allow Floridians to be able to own their home without having to pay ‘rent’ to the government,” he said.
On the surface, getting rid of property taxes may sound like an appealing idea. After all, who wants to pay the government thousands of dollars annually to continue living in a home they already own?
But some have questioned whether DeSantis’s push to slash or eliminate them could do more harm than good.
The Florida Constitution specifies that property taxes are dedicated to funding local governments, while sales taxes go to fund state government. Counties, municipalities, school districts, and special districts all rely on property taxes as a major source of unrestricted general revenue.
Property taxes make up 50 to 60 percent of school district revenue and around 18 and 17 percent, respectively, of county and municipal revenue throughout the state, according to the Florida Policy Institute, an independent, non-partisan research organization. In a February report, the institute warned that eliminating property taxes would be a “risky proposition” for local governments.
Counties and municipalities often count on property taxes to fund public safety, parks and recreation, street maintenance, and other major services or expenditures, Casey Cook, chief of legislative affairs at Florida League of Cities, told the Palm Beach Civic Association.
“Generally speaking, the largest expenditure for property tax revenue is public safety services – the police and fire departments,” Cook said.
A deep cut to property taxes, without replacement revenue for local governments, would lead to some “tough decisions,” he said. “That would most likely mean cuts to services and [employee] positions. Safe isn’t free.”
Palm Beach owners paid $454 million
In the town of Palm Beach, during the fiscal year that ends on September 30, owners of 9,264 properties paid a total of just over $454 million in property taxes to the town and seven other tax districts.
That worked out to $14,870 in property taxes per $1 million of assessed (taxable) value, according to the town’s Finance Department.
The Palm Beach County School District and Palm Beach County collected $193 million and $138.6 million, respectively, amounting to 73 cents of every property tax dollar paid in the town.
The Town of Palm Beach received roughly $80 million, or 17.6 percent. The remainder went to the county health care district ($20 million), children’s services council ($15 million), South Florida Water Management District ($6 million), Everglades construction ($1 million) and Florida Inland Navigation ($900,000).
Property tax revenue traditionally accounts for two-thirds of all revenue in Palm Beach’s annual operating budget.
During the new budget year that begins October 1, Palm Beach expects to collect $85.7 million in property tax revenue, or 67.3 percent of the proposed $127.3 million spending plan.
Bob Miracle, Palm Beach’s deputy town manager for administration and finance, told the Civic Association that property tax revenue is critically important to the town’s ability to provide public safety and other essential services.
The total property revenue paid to the town is equivalent to the combined budgets of the Police, Fire-Rescue and Public Works departments – the three largest local government operations – along with the entire Finance Department and the Information Technology and coastal defense programs, Miracle said. That totals $84.7 million.
“You have to provide safety through law enforcement and emergency response,” Miracle said. “Public Works [encompasses] stormwater drainage and engineering projects, including coastal protection. People get their trash collected by Public Works sanitation crews every day. All of those are critical.”
The prospect of abolished property taxes raises an enormous question mark about how local governments would operate going forward, Miracle said.
“I cannot imagine [the state legislature and governor] would actually try to eliminate all property taxes because, if they do, I don’t know how any municipality is going to function without an alternative revenue source,” Miracle said. “We know there would have to be a replacement, but we don’t know what that would be.”
$43 billion paid statewide
If state legislators do away with property taxes, they will need to raise $43 billion annually (in today’s dollars) to maintain all the public services currently funded throughout the state with property tax revenue, according to the Florida Policy Institute.
Eliminating property taxes would erode local fiscal autonomy while exacerbating the state’s reliance on sales taxes, which disproportionately burdens families and workers with moderate to low income, the institute contends on its website.
According to the institute, the state’s 6 percent sales tax would have to be doubled to 12 percent to close the $43 billion budget gap that would open up without property taxes. That would make Florida’s sales tax by far the highest in the nation, which is currently led by California at 7.25 percent.
Another concern: sales tax revenue tends to shrink during economic downturns.
“Generally speaking, the housing market has been a lot more resilient than the sales tax during recessions,” Cook said.
Acrimony in Tallahassee
DeSantis and Florida House Speaker Daniel Perez, R-Miami, have been at odds over how best to provide tax relief to Floridians. Earlier this year, DeSantis dismissed as “dead on arrival” Perez’s proposal to trim the state sales tax from 6 percent to 5.25 percent.
That plan failed after Senate President Ben Albritton rejected it over concerns that its $5 billion price tag would leave the state with too few resources to pay for vital services in the future.
Legislative leaders discussed property tax relief throughout the 2025 session that ended in June. They ended up calling for a study – an idea vetoed by DeSantis, who said it’s time for action, not analysis.
DeSantis proposed a property tax rebate for homeowners this year to provide more immediate relief while legislators craft language for a ballot question in 2026. The tax rebate, which would have averaged $1,000 for each homesteaded property owner, failed to receive legislative approval.
In April, Perez announced the creation of Select Committee on Property Taxes to conduct an intensive study on property taxes with the goal of bringing reform before the voters next year.
Perez questioned how the elimination or property taxes would work. If property taxes go away, how would local governments pay for police, fire, infrastructure and other vital services that their constituents expect? Perez said DeSantis has not answered that question.
DeSantis declined Perez’s invitation to appear before the select committee, which the governor has dismissed as a “dog and pony show.”
The select committee, led by Rep. Toby Overdorf, R-Palm City, and Vicky Lopez, R-Miami, as chair and vice chair, respectively, met on May 1 and May 13. A third meeting was expected this fall but has not been scheduled.
Albritton and Perez have asked their memberships to talk to constituents in their home districts over the summer to learn their ideas about tax reform.
Cook said the Florida League of Cities has not taken a position on the issue because, as of now, legislators have not put forth a plan.
“For now, our goal is to educate as many legislators as possible so they can make informed decisions before they put something on the ballot,” he said.
DeSantis, meanwhile, has shown no sign of softening his stance.
Last month, he appointed Blaise Ingoglia as Florida’s new chief financial officer. Ingoglia, who served in the Florida Senate 2022-25 and Florida House of Representatives 2014-22, said he will use his office’s auditing authority to examine local government finances and identify excessive spending.
Ingoglia said he is committed to finding a pathway toward property tax relief for the taxpayers.
“Local budgets have been bloated, probably beyond what we have seen in the mid-2000s – it’s gotten that bad again,” Ingoglia said. “Local governments are going to have to cut back.”
How are property taxes calculated?
Property appraisers assess the taxable value of properties within their respective counties. Tax bills are mailed by the tax collector and become due November 1.
The various taxing authorities adopt annual budgets and determine their property tax (millage) rate to fund their budget. One of Palm Beach’s eight taxing authorities is the Town Council, which will approve a 2025-26 operating budget and property tax rate at a public hearing on September 18 at 5:01 p.m. in Town Hall. The new budget will take effect October 1.
The amount of property taxes paid by a property owner is determined by the taxable value of the property and by the tax rates set by the various taxing authorities. The Town of Palm Beach collects about 17-18 percent of all the property taxes paid in the town.
To determine taxable value, property appraisers arrive at a market or “just” value based on what they estimate a property would sell for on the open market as of January 1 of each year.
The taxable value is derived from the market value with two key adjustments: assessment caps and exemptions intended to shield owners from steep tax increases caused by rising property values.
Assessment caps limit how much the taxable value can increase each year. For properties with the Homestead Exemption, the 1992 “Save Our Homes” constitutional amendment limits annual increases in taxable values to 3 percent, or the change in the Consumer Price Index, whichever is less. For non-homestead properties, the annual increases are capped at 10 percent.
Various exemptions can also lower the taxable value. The most common is the Homestead Exemption (for properties that are the owner’s primary residence), which can reduce the taxable value by up to $50,000. Roughly half the properties on the island have the exemption, according to Miracle.
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