Views oppose on Amendment 3

Florida voters will decide in November whether to substantially expand the state’s homestead exemption, a proposal that has fueled an ongoing debate over affordability and how local governments pay for essential services.

Amendment 3 would increase the homestead exemption for non-school property taxes to $150,000 in 2027 and $250,000 in 2028, with inflation adjustments thereafter. The proposal would also lower the annual assessment cap for non-homestead property from 10% to 5%.

For homeowners, the measure could mean a lower property tax bill; for local governments, less tax revenue.

Kevin Batdorf, a former St. Petersburg mayoral candidate and longtime real estate professional who previously served as president of the Shore Acres Civic Association, sees the proposal as significant relief for homeowners.

“It would be a game changer. This amendment actually helps the lower income earners, elderly people on fixed incomes. Why are we charging people taxes, in essence, rent on their property,” he said.

On the campaign trail, Batdorf presumed that infrastructure and hurricane response would be the hot ticket topics. They were not. It was affordability. “It was the concern of everybody,” he said.

Batdorf went on to call out the budgetary shortfall as misleading, considering the financial windfall that preceded and the new taxes the city accrued when the housing market shot up.

The relationship between rising home values and property taxes, however, is not always straightforward.

In Florida, property taxes use three important numbers: Just/Market Value, Assessed Value and Taxable Value. Market Value is what the Property Appraiser says your property was worth as of Jan. 1 every year.

For homesteaded properties, Save Our Homes limits how quickly assessed value can increase from one year to the next. That can create a gap between a property’s market value and its assessed value.

An unchanged rate does not necessarily mean an unchanged bill. Rising taxable values can generate additional revenue for a city without an increase in its millage rate.

When a homesteaded property changes ownership, the previous owner’s Save Our Homes assessment limitation generally comes off. The property is reassessed at just value as of Jan. 1 following the change in ownership, establishing a new assessed value for the new owner. That can produce a substantially higher taxable value, and therefore a higher property tax bill, even when the millage rate remains unchanged.

For St. Petersburg, that taxable value becomes part of the citywide tax base. Recently, the city kept its property tax rate at 6.4525 mills for fiscal year 2027. Keeping the rate flat, however, does not keep the city’s property tax collections flat.

Batdorf argues that Amendment 3 does not have to come at the expense of essential services.

“Amendment 3 gives a lists of items to be paid for with property taxes. If you go with that formula, no essential services will be cut. Anything else is fearmongering. There’s enough fat in the budget right now as is. You could cut 5% across the board. Look at police budget, they have Flock cameras in their budget, but a lot of people don’t like Flock cameras, so cut it,” said Batdorf.

State Rep. Lindsay Cross, a St. Petersburg Democrat who represents Florida House District 60 and works as an environmental scientist, sees the issue differently.

“It’s going to cut a lot of the core services that people are going to rely on from government, impacting public safety and infrastructure funding, as well as parks and library services,” Cross warned. “Municipalities will have to look into other instruments.”

It will be difficult, because local government is hobbled in terms of how to increase revenue elsewhere. For example, only the state can raise sales tax or gas tax. Property tax is the biggest, and one of the only, ways local governments can generate money for its services.

The stakes are significant in St. Petersburg. The city has already begun preparing for the possibility of Amendment 3 passing, with administrators estimating it could reduce General Fund revenue by tens of millions of dollars. Nearly all of the city’s property tax revenue currently goes toward police and fire services.

The debate is further complicated by how Florida calculates property taxes, and many confused voters don’t realize their Assessed Value can continue rising even as their home’s Just/True market value falls. Save Our Homes limits annual increases in the assessed value of homesteaded property, but a cap is not the same as a freeze.

When assessed value remains below market value, it can continue increasing within the constitutional cap even during a year in which market value declines.

In this year’s Truth in Millage (TRIM) notices, some property owners faced stark, confusing news: their property value decreased, but their taxes increased. How and why, and is it fair?

“I think all of this is very confusing for people. It speaks to why there can be differing messages about these types of initiatives,” said Cross.

Cross stated that Florida’s property tax structure needs a more scalpel-esque approach.

A group called the Florida Taxation and Budget Reform Committee (TBRC) can do just that – they have the unusual power to put certain proposed constitutional amendments directly before Florida voters without first getting approval from the Legislature, meaning they can thoroughly examine the trade offs, then advise the public coherently.

However, the TBRC can only meet every 20 years, and their next meeting is slated for 2027. Amendment 3 will appear on a ballot this November.