County Administrator John Titkanich last week unveiled the nearly $600 million budget he is recommending for the 2025-26 fiscal year, and he made sure everyone understood the thrifty nature of his spending plan.
At different points in his Thursday afternoon presentation, which would keep the county’s General Fund millage rate at $3.55 for every $1,000 of valuation for the sixth consecutive year, Titkanich referred to his budget proposal as “fiscally conservative,” “fiscally responsible” and “fiscally disciplined.”
He also explained why it was imperative for the county to continue to embrace its tradition of “fiscal prudence” – and the reasons stretched from here to Tallahassee, where the Florida Legislature’s discussions this past spring about cutting taxes have sent a shiver through local governments around the state.
In his budget message, Titkanich warned the County Commission that such measures by the state, particularly if they included significant reductions in property-tax revenues, could force local governments to reshape their finances.
“It’s unrealistic to assume local governments won’t be impacted if state revenues are at risk,” Titkanich wrote, alluding to potential cuts discussed during the legislative session that concluded last month.
“Proposals to cut taxes, expand homestead exemptions and roll back millage rates threaten to disrupt traditional revenue sources, risking financial instability.”
That’s because local governments, as well as school districts, rely on those revenues, which totaled $55 billion during the past fiscal year, to help fund their budgets and provide essential services to their communities.
Many state lawmakers, however, suggested reducing taxes – especially property taxes – to make Florida a more affordable place to live, claiming residents are already overburdened by inflated real-estate values and ridiculous premiums to insure their homes and automobiles.
As it turned out, a dispute between House and Senate leaders over tax cuts reached an impasse, and the $115 billion state budget signed by Gov. Ron DeSantis on June 30 included no reduction in property taxes.
A compromise between the two chambers did result in elimination of the tax businesses pay on rents and a targeted expansion of tax holidays for consumers, however.
“We’re relieved that there was nothing done on the spur of the moment this year,” Vero Beach City Manager Monte Falls said, referring to property tax reform. “But there was a discussion, so we’ll continue to monitor the situation with our lobbyist.”
They need to.
Titkanich, who admitted he was “very mindful” of what was happening in the state capital as he and his staff prepared the county’s budget proposal, said he would be surprised if the governor and Legislature didn’t revisit the tax cuts next year.
This past April – amid what seemed to be outrageous conversations about doubling the homestead exemption and even eliminating property taxes – the House formed a Select Committee on Property Taxes to further explore ways to reduce the cost of living in Florida.
Rep. Robbie Brackett, a former Vero Beach mayor, was appointed to the committee. He said last week he and his colleagues will work throughout the “offseason,” and even conduct town-hall-type meetings around the state between now and the start of the next legislative session in January.
The committee will continue to take a hard look at reducing property taxes, increasing the state’s $50,000 homestead exemption, and rolling back millage rates – and do so without causing financial hardship for local governments.
To that end, the 37-member committee plans to get input from the Florida Association of Property Appraisers, Florida Association of Counties and the Florida League of Cities.
“Anything we do regarding property taxes needs to go to referendum, and our goal is to get something on the ballot in November 2026,” Brackett said. “It’s a very aggressive goal, but I’m cautiously optimistic.
“We’re going to keep an open mind and see what we find,” he added. “We’re going to keep looking. There’s no rock we won’t look under. There’s nothing that’s not on the table.”
DeSantis continues to champion efforts to eliminate property taxes, which he described as homeowners effectively paying rent to the state. He said he wants Floridians to own their homes “free and clear.”
And while getting rid of property taxes might sound appealing to many homeowners, Brackett said it would be “super difficult” to do.
“That’s a big lift,” he added.
Even reducing property taxes would create challenges, local officials say, especially when recent indicators show our once-sizzling housing market has begun to cool and forecasts for the national economy remain uncertain as we head into 2027.
In the proposed budget, ad valorem taxes account for about 72 percent of the county’s revenues, including an additional 8.8 percent increase ($8.68 million) attributed to an increase in tax rolls and property values.
“If the state increases the homestead exemption by $25,000, it would have an impact of about $5 million on our revenues,” Titkanich said, adding that 72.4 percent of the county’s General Fund expenses are tied to state mandates.
Those mandates include the funding of constitutional officers andother state agencies funded proportionally to services provided in the county – such as the 19th Judicial Circuit Court Administration and the offices of the State Attorney, Public Defender, Medical Examiner and Guardian Ad Litem.
In Titkanich’s proposal, the Sheriff’s Office alone accounts for nearly 52 percent of the General Fund budget, despite the agency not receiving anything close to the 18.5 percent increase requested by Sheriff Eric Flowers, who sought to bump his spending from $78.9 million to $93.6 million.
“Property values have gone up, which generates more ad valorem revenue, but we’re starting to see a change,” Titkanich said. “Property values are coming down and houses for sale are on the market longer.”
Also, as Brackett mentioned, the surge of newcomers moving to Florida appears to be slowing.
Which raises the question: Is this the right time for state lawmakers to consider cutting or reducing property taxes?
“Anything they do that reduces the amount of ad valorem tax revenue cities and counties receive makes it more difficult for us,” Falls said. “Local governments have to provide for their residents, but how do you maintain the same level of service with less revenue?
“We have a constant demand for higher levels of service, and those services are typically General Fund expenses paid for by property taxes,” he added. “There aren’t many good options.
“You have to either cut services, cut costs or impose service fees – unless the state provides another source of revenue to make up the difference.”
Vero Beach’s budget for the 2024-25 fiscal year was $34.6 million, and Falls and his staff are working on their proposed budget for 2025-26. He said ad valorem taxes currently account for about 35 percent of the city’s revenues.
“It’s our single-biggest revenue line item, so we’re very cognizant of what’s going on around us,” Falls said. “We’re glad Robbie is on that committee, because he knows how local governments work. But this is going to be an issue all over the state.”
Indian River Shores Town Manager Jim Harpring was traveling and not available for comment.
Should state lawmakers rally enough support to put property tax reform on the November 2026 ballot – and it passes – the constitutional amendment probably wouldn’t take effect until 2027 or, more likely, 2028.
Much can happen between now and then, economically and politically, and Titkanich wants to make sure the county has the financial wherewithal to handle whatever comes.
“As much as the state is preparing for the impact of an economy cooling off and the potential of reduced intergovernmental revenues, so should Indian River County,” he wrote in his budget message.
“While acknowledging the pressing economic and fiscal challenges that could potentially redefine our revenue landscape,” he added, “our roadmap forward remains both resilient and innovative.”
It needs to be – because that House committee, with the governor’s backing, appears to be on a mission.
“We’re going to look at what’s possible,” Brackett said, “and then see if it’s feasible and sustainable.”
