How deeply will Palm Beach be affected if a ballot question cutting property taxes throughout Florida is approved by voters in November?
The initial impact would be a few million dollars – a modest percentage of the town’s $127 million operating budget, Deputy Town Manager Bob Miracle told the Town Council at its June 9 meeting.
But the long-term consequences of statewide property tax reform haven’t been fully determined and could be more serious, Miracle said.
During a June 1-3 special session called by Governor Ron DeSantis, the Florida Legislature approved a property tax reform plan that goes before voters in the November 3 general election. It will require 60 percent approval to pass because it is a proposed constitutional amendment.
The measure would increase the tax exemption for homestead property owners to $150,000 in 2027 and $250,000 in 2028. The exemption, which is available for properties declared to be the owner’s primary residence, is currently limited to $50,000.
For all levies other than school district levies, the tax reform measure before voters would limit increases in the assessed value of all non-homestead properties to 5 percent annually beginning in 2027. The annual cap is currently 10 percent.
The measure would restrict local governments’ ability to use property taxes to finance public services beyond the scope of public safety, education, infrastructure, natural resources, bond issuance and debt service payments, employee retirement benefits, and administrative/operational expenses related to certain local government employees.
If it passes, Miracle said the amendment would not affect Palm Beach’s budget until the 2027-28 budget year, which begins October 1, 2027. During that year, property tax revenue paid to the town by homestead owners would decrease by $1.3 million. During the 2028-29 budget year, homestead property tax revenue would fall by $2.4 million.
Under a new 5 percent annual cap for taxable growth in non-homestead properties, taxes paid to the the town by non-homestead owners would decrease by $1.6 million, Miracle said.
“Totaling that, you have got an impact of nearly $3 million in fiscal year 2028, and almost $4 million in fiscal year 2029,” he said.
DeSantis has called for drastic reductions or the complete elimination of property tax revenue statewide, saying it’s time to provide tax relief for homeowners who have been hit by years of tax increases tied to surging property values.
The state’s counties, municipalities, school districts and other taxing districts rely on property tax revenue to pay for core services including, for example, police and firefighter-paramedic response.
Property taxes accounted for 74 percent of local tax collections in Florida as of fiscal year 2023, according to the non-profit, nonpartisan Tax Foundation. Homestead property made up more than 46 percent of the market value and 36 percent of the taxable value of all real property in Florida.
There are roughly 9,250 taxable parcels in Palm Beach, about 40 percent of which carry the homestead exemption.
Property tax revenue makes up roughly two-thirds of Palm Beach’s $127 million operating budget.
Miracle said there are proposed additional increases to the homestead exemption in the future.
He said the legislature has discussed additional restrictions to prevent a “tax shift” caused by local governments looking for ways to make up the shortfall in property tax revenue.
“If this passes, it’s not over yet,” he told the council. “There could be additional legislation that comes out in 2027 that could further damage all the communities, including us.”
With a $250,000 exemption, a homestead owner of a property in Palm Beach with an assessed value of $1 million would save $1,709 in property taxes, according to Miracle. But, even with that reduction, that owner would still pay about $13,160 in property taxes, including $2,089 to the town; $3,626 to Palm Beach County; $1,123 in special district taxes; and $6,321 to the county school district.
The Town of Palm Beach collects 17 cents of every property tax dollar paid by owners in the town. The remainder goes to other tax districts.
Miracle questioned whether there is a property tax problem in Palm Beach, where the council has repeatedly lowered the property tax rate to help offset annual increases in property values.
In 2019, the owner of a property with an assessed value of $1 million paid $2,978 in taxes to the town. In 2026, the same owner, with the 3 percent homestead cap on annual taxable growth, paid $3,081 in property taxes to the town on an assessed value of $1,230,000, according to Miracle.
Council member Nicki McDonald said Palm Beach is fortunate to have a strong tax base. She noted that, according to the Florida League of Cities, the reduction in property tax revenue would impact the financial stability of up to 85 municipalities across the state.
“While taxpayer funds cannot be used to advocate for or against the amendment, it is critical that we begin now to identify appropriate ways to educate our residents, so they understand what is at stake before voting in November,” McDonald said.
The town will continue to examine the impact of the amendment at the council’s July 16 meeting on the town’s 2026-27 operating budget, Miracle said. The meeting is scheduled to begin at 9:30 a.m. in the meeting chambers at Town Hall.
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