Local leaders express property tax elimination concerns

State Senator Nick DiCeglie recently told city council members, much to their dismay, that the governor is intent on eliminating or significantly reducing property taxes. 

Those revenues account for 73% of St. Petersburg’s general fund, and most of that money supports public safety. Governor Ron DeSantis pushed to cut property taxes throughout a chaotic legislative session and recently pitched a plan to offer $1,000 rebates for each homesteaded property. 

While DeSantis said the lawmakers could approve the latter proposal this year, eliminating property taxes altogether would require a ballot referendum in November 2026. St. Petersburg officials discussed the potential impacts during a July 27 legislative committee meeting and a budget presentation later that day. 

“It’s clear to me, and should be clear to all of you here, that the governor is pretty focused on having a (property tax) question on the ballot,” DiCeglie said. “But I share the same concerns.” 

The Florida Policy Institute reports that property taxes generate $55 billion annually. The non-partisan think tank estimates that sales taxes may need to double, from 6% to 12%, to compensate for the loss in funding. 

St. Petersburg has $228.9 million in ad valorem revenue to fund a $411.76 million operating budget in fiscal year 2026. Assistant City Administrator Tom Greene said 95.6% of that money “pays for our police and fire departments.” 

Councilmember Lisset Hanewicz called the potential shortfall a “big concern” for city officials, as residents expect a “level of service” from their local government. “The money is going to things that we really need,” she said. 

If approved, Florida would become the first state with no income or property taxes. In addition to eliminating the critical funding source, lawmakers are considering a $500,000 homestead exemption, capped at $1 million for seniors, and a 15% cap on assessment increases. 

“Property taxes effectively require homeowners to pay rent to the government,” DeSantis said in a prepared statement. He pitched the homestead exemption proposal in March and subsequently vetoed a study to evaluate how local governments use the revenue and the impacts of a reduction. 

“There’s no way the state is going to be giving tens or hundreds of millions of dollars directly to cities and counties to make up that difference,” Rep. Lindsay Cross said Thursday. 

From left: Sen. Nick DiCeglie, Sen. Darryl Rouson, Rep. Lindsay Cross and Rep. Michele Rayner. Photo: St. Petersburg Area Chamber of Commerce.

DiCeglie said the governor is “brushing off” the roughly $300 million potential shortfall for rural areas. He stressed the importance of letting the local delegation know those “large numbers” in a city like St. Petersburg that will resonate “when we try to balance a budget.” 

While $300 million will not “break the budget,” DiCeglie, a Republican, believes that each city losing hundreds of millions of dollars should put “a lot of our colleagues at the end of their seats.” 

“I don’t support a complete elimination of property tax,” DiCeglie said. “I’m not interested in handicapping local governments and their ability to provide services that we all expect, as we should.” 

Rep. Michelle Rayner is one of 37 lawmakers on a House Select Committee created to study property tax reform. DeSantis bemoaned the bipartisan group in May at a press conference in Tampa before vetoing $1 million for the initiative. 

“You convene a 37-person committee if you’re trying to smother it in the crib,” he said. “They’re trying to kill any chance of property tax relief by doing this committee.”

Cross, a Democrat, said the committee will continue meeting throughout the summer. She does not believe there is much of an “appetite to hear from our major metropolitan cities about their property tax flows.” 

Councilmember Deborah Figgs-Sanders noted that schools receive 33% of Pinellas County property taxes. The district is currently scrambling to overcome the loss of $10.7 million in federal and state funding. 

Opponents believe eliminating ad valorem taxes would disproportionately benefit wealthy property owners while negatively impacting the average resident. Raymond James Financial ($130.37 million) topped St. Petersburg’s taxpayer rankings in 2024; downtown developments occupied second through eighth place.

In May, economic and workforce development director Brian Caper said those developments “generate significantly higher tax revenue per acre and greatly contribute to the city’s ability to fund new projects and programs throughout St. Petersburg.” For example, the Ascent condominiums paid $100.4 million per acre, compared to just $4.6 million for Raymond James.

David Thompson, director of government affairs for the city, reiterated Thursday that the governor is “very keen on eliminating property taxes, at least for homesteaded properties.” DiCeglie called it a “huge topic of conversation,” and said the “devil is in the details.”

“I think as we get to committee weeks, maybe we’ll have a better idea,” he added. “But we’ll see how it all plays out.”