Florida Property Tax Reform: Exploring Elimination Challenges

Florida Governor Ron DeSantis was recently elected. expressed his support for the elimination of property taxes Within the state or at least an important reduction. Despite the appeal of this proposition to Floridians it is likely to be a long road to reality.

DeSantis responded to a post suggesting the abolition of property taxes in Florida, indicating his support for such an initiative and agreeing with those who advocated on X (formerly Twitter) that it is not appropriate to calculate tax on newly built homes based on their estimated values. DeSantis replied to a comment suggesting that property taxes be abolished in Florida. He backed the initiative, and agreed with the statement “taxing the land/property was the most oppressive and ineffective taxation venture.” DeSantis has also said that he supports the abolition of property taxes in Florida. He believes this is a more oppressive and ineffective form of taxation. stated“We need to put on the ballot the most bold amendment that can get that 60%.”

Florida Property Taxes: Is it Possible to Eliminate Them?

In Florida, property taxes are administered at the local government level. Abolishing the tax requires an amendment to Florida’s Constitution. A joint resolution must be passed by both houses of the legislature with three-fifths approval. The final step is 60 percent voter approval in general elections.

Eric Trump, the son of Donald Trump former president, commented on the Facebook post: “Florida Leading the Way!” “This is incredible!”

Florida is one of only a few states that do not impose a state tax, or tax Social Security benefits. Itai Harpaz is a professor at St. John’s University and critics say that eliminating the property tax could reduce government funding.

Florida’s idea to abolish property taxes is growing in popularity. Jonathan Martin from Fort Myers has introduced SB 852, a bill that will be discussed during the legislative session beginning March 4 and focuses on the possible impacts of removing property taxes.

This would include a review of the effects “on education, infrastructure and emergencies services”, as well as assessing whether Florida would be more attractive for businesses than other states if it had consumption-based taxes.

The Sunshine State: Potential Impact

Florida would be unique among all states if it eliminated property tax. Harpaz stated, “Florida is the only state in which property taxes aren’t collected.”

This concept has many challenges. One of them is replacing traditional property tax revenue. Harpaz states that the revenue previously received through property tax would either need to be replaced by other sources of income or expenditures would likely have to be reduced.

Harpaz says that Florida “supplements” the lack of state income taxes with revenue sources such as sales tax. This is due to a “thriving economy,” “ample tourism,” and “positive net migration.” Even with Florida’s high economic growth, it is difficult to replace revenue lost from the complete removal of property tax.

Harpaz says, “Property Taxes help fund essential services, such as schools and police and fire departments. So the foregone income would have to somehow be made up.” Florida has a strong economy, but it would still need billions to replace revenue lost to essential services funded by the property taxes.

Alexis Santis, a researcher at the Florida Policy Institute, is working on a study that will show how households with low to moderate incomes, such as renters, would be disproportionately affected by an increase in sales tax to compensate for lost revenues.

The author continues, “local government would lose their fiscal autonomy and become reliant upon state funding. This could result in underfunding or competition for resources.”

Santis explains that, “While reforms to the property tax system such as taxation on high-value properties or circuit-breaker programs could help address equity issues, their complete elimination would destabilize local budgets while undermining investments in communities.” This proposal highlights the importance of a careful balance between fiscal sustainability and equity when addressing Florida’s affordability issues.

Property Tax Reform: A Growing National Trend

Itai Harpaz notes that property tax reform appears to be gathering momentum in the U.S., with proposals for reform appearing in states like North Dakota, Illinois and Texas. This indicates a shared interest in reducing, or even eliminating, property taxes.

Harpaz says, “Sure, people and companies prefer lower tax rates or no taxes at all.” In part, the rise in housing prices is driving the reduction or removal of property tax. Property taxes are based on assessed values of properties.

Moreover, “Lowering property taxes could also be part of tax competition among states—attracting prospective homebuyers and inward migration. Florida is one of the states that has seen an influx in recent migrations from other states.

Many experts believe that such an initiative is not feasible for local government.

Ronald C. Fisher is a professor of Economics at Michigan State University. He called the decision “a counterproductive policy.” The professor argues that the property tax is essential for local governments to continue operating and maintain their financial health.

Fisher suggests instead of trying to eliminate or dramatically reduce property taxes that the state governments should concentrate on improving accuracy in property assessments so they better reflect tax levels.

Fisher says that focusing on property assessments would improve the property tax, without needing to replace it.

Tax Foundation also reached the same conclusion in its recent report. The Tax Foundation reached a similar conclusion in a recent report.

Analysts at the Washington-based think tank suggest, “the property tax is a tax worth saving—and therefore worth reforming. Politicians should try to limit the runaway increase in the property tax liabilities that are seen in certain parts of the United States, but not by eradicating or dramatically reducing a tax which is economically efficient.