Important Update from the Florida League of Cities
Homestead Property Tax Assessments: Limitation on Increases
Municipal Impact Data Request
Overview
SJR 122 (Avila) is a proposed constitutional amendment that (if approved by voters in 2024) would lower the homestead property tax valuation caps from 3% to 2%. SB 120 is the implementing bill that is traveling with SJR 122.
SJR 122 and SB 120 will be considered by the Senate Community Affairs Committee on Wednesday, February 15, 2023, at 11:00 a.m. ET.
Current Status
The Florida League of Cities (FLC) Legislative team is actively engaging Senators on the Senate Community Affairs Committee to communicate several concerns about the bills.
These bills would not be a tax cut but a tax shift. Providing exemptions for homestead properties puts a higher burden on hardworking renters and businesses.
These bills take a one-size-fits-all approach by design. But what is good for some communities is not always good for others. A decision to provide property tax relief should be made at the local level, not through a statewide constitutional amendment.
These bills force cities to consider raising their millage rates to offset the reduction in resources funding city services. Higher millage rates mean higher property taxes.
Florida’s property tax system is complicated. This constitutional amendment makes it worse, more complex and less fair.
The real estate market in Florida is highly cyclical, with years of “boom” followed by periods of “bust.” If 2008 taught us anything, it’s that property tax reform should not be made when the market is impacted by high inflation and variable interest rates.
A reduction in the cap will only make it harder for cities to react to real-estate market fluctuations and continue to provide services to their residents and businesses.
Action Needed (Time-Sensitive):
We need your help to provide specific data on how this could impact your city. Please ask your City Manager to provide the following information:
What is the worst-case scenario? Look back to the impacts of the 2008 recession to provide examples of what may happen if real estate values drop.
How long has it taken your city to recover homestead property tax values from the recession? What did your city have to do to adjust to the financial impacts of the recession?
What would a 2% cap mean to your budget in today’s dollars?
Send your responses to these questions to Michaela Metcalfe at mmetcalfe@flcities.com by noon ET on Tuesday, February 14.
