economics

Perhaps it hasn’t been clear to my readers, especially those who don’t live in Florida, what exactly Amendment 3 does. First a brief review of how Florida does property taxes.

In Florida, the county property appraiser is an elected position that estimates what your house is worth each year, called your “market value.” If your house is your primary residence, you can take a deduction from this valuation called the “homestead exemption” of $25,000 from that market value. There is a second $25,000 deduction that applies to value above $100,000, but only for non-school taxes. The result is called your “assessed value.” Clear as mud so far?

The tax collector for your county (also an elected position) charges a “millage rate” as an “ad valorem” property tax, and this rate is set by the local and city governments where your house is located. Each “mil” is 0.1% (1/1000th) of your home’s assessed value. There are other things invovled and it can get quite complicated, but those are the basics.

Example: Let’s say the property appraiser says your house is worth $500,000. You live in it as your primary residence, so you claim the homestead exemption. You would then pay school taxes on $475,000 of that value and ad valorem taxes on $425,000 of that property.

Your county charges a property tax rate of 4 mills, the school board charges of 4 mils, and the town you live in charges 6 mills. Your tax bill would be:

• $1800 to the county
• $1900 to the school board
• $2700 to the town
• So your total tax bill is $6400.

What people in Florida are angry at, is during COVID a lot of people moved here from other states and began remote work. It created a super building boom, housing prices skyrocketed, and tax revenues, since they are tied to real estate valuation, went up with them. Population in Florida increased by 20-30%, but tax revenues doubled or even tripled during the same period. As a result, counties and cities are flooded with tax revenue, but homeowners are getting bent over the tax collector’s desk, and there isn’t even any K-Y.

So Amendment 3 has gained traction. What it does is this:

• increase the homestead tax exemption for non-school taxes to $150,000 in 2027
• Then increases the non-school homestead exemption to $250,000 in 2028, with the amount indexed to inflation starting in 2029
• provide that new residents receive a smaller exemption until they’ve lived in the state for five years
• cap the assessed value increase of non-homestead properties, such as rentals and commercial buildings, to 5%, except for school district taxes;
• limit counties and municipalities to spending property tax revenue on public safety, education, infrastructure, natural resource projects and flood control, local bonds, employee retirement benefits, and government operations

What does this mean? It means that school tax revenue won’t change. It means taxing authorities that aren’t schools will lose about 10% of their tax revenue compared to 2026. (Ad valorem taxes are about 18% of county and city budgets). So in our example above, the taxes on our $500,000 house in 2027 would be:

Your Property Taxes in 2027 with Amendment 3

The property appraiser still says your house is worth $500,000. You live in it as your primary residence, so you claim the homestead exemption. You would then pay school taxes on $475,000 of that value and ad valorem taxes on $325,000 of that property.

Your county charges a property tax rate of 4 mills, the school board charges of 4 mils, and the town you live in charges 6 mills. Your tax bill would be:

• $1300 to the county
• $1900 to the school board
• $1950 to the town
• So your total tax bill is $5150.

Amendment 3 in 2028

Then in 2028, it would change again. The property appraiser still says your house is worth $500,000. You live in it as your primary residence, so you claim the homestead exemption. You would then pay school taxes on $475,000 of that value and ad valorem taxes on $250,000 of that property.

Your county charges a property tax rate of 4 mills, the school board charges of 4 mils, and the town you live in charges 6 mills. Your tax bill would be:

• $900 to the county
• $1900 to the school board
• $1350 to the town
• So your total tax bill is $4150.

In this case, Amendment 3 would save you about 35% on your tax bill on a $500,000 house.

If your house was worth more or less, the savings would change.

• On a 250,000 house, your 2026 taxes would be $2900, and your 2028 would be $900, saving you 69%
• On a 750,000 house, your 2026 taxes would be $9900, and your 2028 would be $7650, saving you 23%

Criticism

Critics claim this would benefit the rich. They are playing math games. The lower ends of homeowner values would see the largest savings- a person with a $250,0000 house would see their taxes cut by nearly 70%, but would get a $2000 savings, while the owners of million dollar homes would see a cut of 17%, which represents a $2250 cut in property taxes under our fictional millage rates.

They also claim cities will be forced to cut services like police, fire, schools and libraries. They may try to do that, but they aren’t forced to. They can always cut bullshit programs that are nothing but boondoggles, but as I have been showing you in the posts about this, fire and police departments around the state are quite well funded and could probably use some cuts. I say that as a retired firefighter- fire departments have more money than they know what to do with at this point, so they are on a spending spree the likes of which this state has never seen.

So there you have it- Florida’s Amendment 3 in a nutshell. If you see someone who is opposed to it, ask them where they work. It’s probably one of the governments that will see cuts, or an NGO that depends on their gravy train.

It seems that not a day goes by without another locality telling us how they are broke and plan to raise taxes. Yesterday, I told you about the seemingly coordinated social media campaign against Amendment 3. I am going to keep beating this drum, because it’s important.

Cape Canaveral has been discussed on this page before. As I said then: The city of Cape Canaveral in Brevard County has a population of about 10,000 people and encompasses about 2 square miles. In the year 2000, population in the city was about 8,900 people, and it was about 8,000 people in 1990. That’s a growth rate of 0.5% per year over the past 36 years. In 2015, the city spent an amount nearly the same as its entire annual budget building a new city hall, even though it couldn’t even afford a police force.

This city has a population of only 10,000 people, but an annual budget of 40 million and no police department.

and they are broke. They have been running budget deficits for so long, they have spent all of their reserve funds.

They have been spending more than they take in for DECADES. This coming year, they have a $4 million budget shortfall. Rather than rein in out of control spending, this city is considering TRIPLING their tax rate to 10 mils at their September 15 meeting.

The current municipal property tax rate (millage rate) for the City of Cape Canaveral is 3.1429 mils. A family that lives in a modest $250,000 home would be paying $1400 more in taxes next year if this passes. In Florida, your total property tax bill stacks multiple authorities together: Brevard County Public Schools (~6.31 mils), Brevard County Commission (~2.86 mils), and other special water and navigation districts (~0.80 mils), plus the proposed 10 mils for Cape Canaveral would raise that family’s new tax bill from $2,635.65 per year for 2026 to $4,007.08 per year in 2027.

That’s why it’s important to take care of this. Since the local government’s can’t control their spending, the taxpayers need to do it for them.

All over Florida, the governments are coming out against Amendment 3, the one that will cut property taxes on homestead property taxes that aren’t for the school board. In its final form, the property taxes on a person’s primary residence that aren’t going to schools will be cut to zero for most people. That will translate to about a 15% cut in local and county tax revenues. The remainder of city and county taxes in Florida come from commercial property, second homes, and other sources.

That isn’t a large cut, when you consider that some counties are collecting 1.5 to 2 times as much in property taxes as they were a decade ago. So instead of collecting that, they will only get 1.3 to 1.7 as much as they were collecting. Oh, the humanity.

The tactic they are choosing is to say that services everyone wants will be cut, because of course they will. Everyone (or most everyone) wants police, fire, and schools funded. So they are rolling out threats of cutting those services. They are also already raising taxes in preparation for it passing. For example, the Osceola county school board is saying this cut will affect them (even though the law isn’t touching school taxes), so they are putting a millage rate increase on the ballot. They want to increase school taxes in Osceola county by $62 million. The school budget for that county is $2 billion, so this represents a 3% increase in the school’s budget, but an 18.8% increase in the school board’s current 5.3 mil tax. Then they go to the old “safety” excuse:

State law mandates that schools have at least one armed security officer during the school day. Osceola County schools are currently staffed by school resource officers through a cost-sharing partnership between the district and local municipalities — including the Osceola County Sheriff’s Office, St. Cloud Police Department and Kissimmee Police Department. Shanoff said that arrangement could be jeopardized if local governments face their own budget constraints, especially as voters statewide consider Amendment 3, which would overhaul state property taxes.

“If the municipalities run short of funds, the responsibility of staffing armed security at schools comes back to the school district, and we will have to go with private armed security, different than having actual law enforcement on campus,” Shanoff said.

That’s not what the law says. There is a provision to allow teachers to be armed, which wouldn’t cost a fraction of what it costs to maintain police on campus, but schools won’t do it even though they all receive grant money from the state to implement it. Osceola county is saving money by contracting the Guardian program to a private security company for armed, uniformed security guards, and using these security guards to replace armed police officers. Since the guards make significantly less money than cops, the school district is likely profiting from the program.

Osceola county governments are flush with cash. Kissimmee fire department recently gave their fire department 15% more time off by adding a fourth shift, but with the same pay. Just in February, that same fire department bought a new heavy rescue truck to replace the old one. That new truck cost more than a million dollars. Saint Cloud is spending $12.5 million on knocking down an old fire station to replace it with a new one, and another $10 million on another new station. St Cloud only has 108,000 residents, but has a $210 million annual budget, or more than $2000 a year for every man, woman, and child.

The local and city governments are flush with cash, and I am betting there is a lot of money being tossed at “social media influencers” to Astroturf support to prevent the gravy train from being cut.

I am deeply in favor of Amendment 3.

We keep hearing about how cutting Florida property taxes is going to cause cities and counties to cut the budgets of the vital services like police and fire. The police and fire unions have come out against the tax cuts, because of course they have. Let’s take a look at what that means.

In another installment of “government is spending money like a kid who found dad’s credit cards” we look at the Kissimmee Fire Department. Let’s take a look at their budget and see how money is being spent:

• In FY 2020-21, the department had a budget of $15.07 million and ran 13,500 calls (pdf warning)
• In FY 2021-22, the department had a budget of $16.57 million and ran 15,542 calls (pdf warning)
• In FY 2022-23, the department had a budget of $17.3 million and ran 15,041 calls (pdf warning)
• In FY 2023-24, the department had a budget of $19.9 million and ran 14,549 calls (pdf warning)

Then for the following fiscal year, the department’s budget ballooned to $24.71 million, despite the fact that they didn’t run an increased call volume, having run 14,837 calls, and then for the year after that, the budget climbed again to $31.2 million. So what changed that necessitated such a drastic increase in budget?

The difference between FY23-24 and FY25-26 is a 56% increase in the fire department’s budget in just two years. A big part of that is in staffing costs. The fire department went from a 3 shift model, where firefighters work 24 hours on and get 48 hours off, to a 4 shift model, where firefighters work 24 hours and get 72 hours off. Despite the fact that firefighters are working 25% less, they are being paid the same amount. This does absolutely nothing to increase the quality of service, but the firefighters get a lot more time off for the same money, so there is that. On an hourly basis, firefighters just received a 34% raise.

That’s not the only increase in costs. Administration costs climbed from $3.5 million to $5 million ( 42% increase) in the same time span. In short, the city is simply throwing money around to the detriment of the taxpayer. How did the city get the money? They raised taxes, of course.

These localities in Florida are spending money left and right. It’s time to rein in this ridiculous spending spree. Fire services can afford some cuts, and so can the rest of government.

Opponents of Florida’s ballot initiative to greatly cut property taxes, both Republicans and Democrats, have been scaremongering voters with predictions of the bad things that will happen once they aren’t stealing your money. The latest is telling parents how localities won’t be able to afford sponsoring summer camp, and this is bad because poor parents rely on summer camp as a free daycare program.

Why am I forced to pay for daycare for someone else’s crotch fruit? Get your sperms donor to pay his child support.