A sweeping property tax overhaul, which has the power to significantly change how local governments are funded, will be on the November ballot for voters to consider.
Super majorities in the Florida House and Senate passed Gov. DeSantis’ property tax referendum proposal with minor changes on June 3.
Most Vero Beach officials, including the mayor and city manager, strongly oppose the measure while Indian River Shores officials seem to generally support the idea of the referendum.
Indian River County officials are concerned about the loss of revenue and have taken some preliminary actions to prepare for a possible hit to the county budget.
Under the amended proposal, if 60 percent of voters approve, Florida residents will see a $150,000 homestead exemption for non-school levies on Jan. 1, 2027, not the $250,000 DeSantis initially proposed. That exemption comes in the second year, on Jan. 1, 2028.
A resident must qualify for homestead prior to Dec. 31, 2026, to get the tax reduction.
At present, people with homesteaded properties don’t have to pay property tax on the first $50,000 of their home’s value, except for the slice of tax that goes to support schools.
Removing tax from another $100,000 the first year and $200,000 the second year would deprive some town, city and county governments of millions of dollars annually that currently are used to pay for police and fire departments, roads, parks and other municipal services.
After 2028, the homestead exemption will be indexed to inflation – so that the exempted amount goes up a bit each year – as the Florida legislature tries to work out a schedule to ultimately eliminate all non-school property tax levies for fulltime Florida residents.
“What better way to celebrate America’s 250th anniversary than a massive property tax cut through a $250,000 homestead exemption for Floridians,” Senate President Ben Albritton said of the legislation.
Indian River Shores Mayor Brian Foley said, “Under the current system, property tax increases are on ‘autopilot,’ because few jurisdictions reduce the millage rate against which rising property values are multiplied to calculate ad valorem taxes. In my opinion, exploring options to reduce ad valorem property taxes was warranted.”
Fiscally, Indian River Shores is in great shape, according to town officials. “We do not anticipate any cuts in services in the upcoming budget,” Town Manager Jim Harpring told Vero Beach 32963.
Harpring, Financial Director Heather Christmas and their staff have done a broad analysis of the proposal. If the measure passes, they expect to lose only $245,000 in the first year the impact of the referendum is felt, followed by $490,000 the following year. Mayor Foley said there isn’t any plan to create taxing districts to maintain services.
“I have seen municipal officials toss out how much revenue is generated by real estate taxes on both a gross dollar basis and as a percentage of the general fund to argue that the sky will fall if those funds are removed,” said Foley.
“But those observations completely miss the point. These increased tax revenues rely on the soaring real estate values which have ballooned over the past six years.”
As Foley notes, property tax revenue has increased substantially in recent years, raising concerns about the impact on homeowners, especially those on fixed incomes.
Indian River County taxable property values have increased by 17 percent over the past two years and doubled in the past decade, from $15 billion in 2016 to more than $30 billion, according to the Florida Department of Revenue. Statewide, property tax revenues jumped from $32 billion in 2019 to more than $56 billion in 2025, according to Gov. DeSantis.
That has given the budgets of cities like Vero Beach a welcome boost. Part of the increase in property values in Vero and Indian River County has been driven by new construction, so the city and county now need to provide additional services and infrastructure for all the new residents.
Vero Beach Mayor John Cotugno and City Manager Monty Falls both believe the proposed property tax reduction would necessitate a painful reduction in city services.
Now that the referendum has been put on the ballot, local officials are prohibited by law from campaigning against it. Before the legislation passed, however, the city council voted 4-1 on Feb 24 to spend $15,000 to hire a communications firm to spread their message about the harm they believe would result from Tallahassee’s plans.
City officials also discussed the matter in city council meetings and participated in a sold-out panel discussion at Riverside Theater in March that was focused on what could happen if homestead property taxes are reduced/eliminated.
On the Waxlax Stage, Falls said services might have to be cut, and fees raised or implemented in places where they are currently free, like for boat ramps and public parking. He also floated the idea that new special assessments for roads and streetlights might be implemented. “It would be a myriad of things,” Falls said.
Cotugno agreed with Falls about the potential loss of city services, and contended that the property tax referendum fundamentally changes home rule.
“Home rule goes away if this bill passes,” Cotugno told the panel audience. “If you allow Tallahassee to dictate how the local property taxes are collected and distributed, then you are at [their] mercy. They’re looking, in their theory, to have efficiencies at the municipal level, which in their vernacular is to eliminate municipalities.”
\Besides reducing taxes on homestead properties, the referendum limits how property tax revenue can be spent.
The referendum will also reduce the 10 percent cap on annual business property tax increases to 5 percent. Lawmakers say it prevents local governments from seeking replacement revenue from non-residential property.
The one vote opposing the public relations consultant back in February came from Vice Mayor Taylor Dingle, who favors the referendum.
“It’s true ownership of your home. Eliminating property taxes puts more money in people’s pockets,” he said.
Photos by Joshua Kodis
