FLORIDA – A state policy research institute said Florida counties will have $406 million less in property tax revenue over the next five years after Amendment 5 passed.
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The Florida Policy Institute (FPI) describes itself as an independent, nonpartisan and nonprofit organization dedicated to advancing state policies that improve the quality of life for all Floridians.
It released a statement after the amendment passed.
Under Amendment 5, Florida counties will collectively have $406 million less in property tax revenue over the next five years alone, according to a recent analysis by state economists. Cities and towns will either have to cut public services funding — dollars that go to things like water, sewer, and emergency services, to name just a few — or raise taxes in order to balance local budgets. While local governments grapple with this reduction in revenue, Floridians will see only modest relief under Amendment 5, as FPI estimates that the 4.3 million households eligible for this inflation-adjusted homestead exemption will see an average of just $20 in savings over the next five years. Plus, since this is not targeted property tax relief, the wealthiest families in the state are among those who will benefit, while small business owners and renters are left out.
Florida Policy Insitute
Amendment 5 will add language to the constitution to adjust the value of homestead exemptions, tying the changes to inflation.
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A homestead exemption reduces a property’s taxable value for the homeowner as long as the property is the homeowner’s permanent residence.
Since it passed, the first $25,000 of a homestead exemption will be indexed with inflation, so when inflation goes up, the homestead exemption goes up as well. The amount of the exemption might increase as costs and prices go up.
The second $25,000 is exempt from everything but school taxes. The tax relief applies to the second $25,000 band and there’s nothing homeowners need to do to get it.
A person with a $300,000 home with the Consumer Price Index published at 3% is projected to save $4 a year under Amendment 5.
St. Johns County Property Appraiser Eddie Creamer said it’s a start to provide homeowners financial relief.
Creamer said property values in St. Johns County skyrocketed 160% over the past eight years.
“Inflation has been, especially in the last three years, very dramatic for all of us,” Creamer said. “Not just what we pay at the grocery store, which we all appreciate a lot, but also in property values and in St. John’s County, where coupled with inflation, we have a strong growth in population and a high demand for homes. Home prices are going up.”
Industry experts said the property appraiser will begin the calculations next year, and even though the savings are minimal, Creamer said this may just be the beginning of more legislative relief for Florida homeowners.
“I think the legislature has seriously looked at the homestead exemption last year,” Creamer said. “I think they seriously looked at a number of different options. I think the legislature appreciates that home values in Florida are going up very rapidly, and perhaps there should be some additional help to homeowners who contain their taxes.”
More than 66% percent of Floridians voted in favor of Amendment 5.