Palm Beach can count on its billionaires to keep picking up the tab for schools, firefighters and parks if Florida slashes property taxes. Many other local governments will have a tougher time making up the difference.
After more than a year of teasing the idea, Governor Ron DeSantis on Wednesday floated a plan that could eventually eliminate property taxes for more than 90% of Florida residents who own their homes, shifting the bulk of the tax burden onto the state’s wealthiest homeowners.
The Republican governor’s proposal would initially increase the state’s homestead exemption, which shields a portion of the value of a primary residence from property tax, from $50,000 to $250,000, and then eventually double it to $500,000. DeSantis called a special legislative session for next week to get the idea on the ballot in November.
Many homeowners are likely to welcome a tax cut in a state where property values have soared, making it more likely that any referendum would hit the 60% threshold needed for passage at both the legislative level and the ballot box. But local leaders fear it could also undercut their ability to fund police, libraries and other services. Florida has no state income tax.
“We can make anything work, we’ll just have to charge a fee for literally everything,” said George Kruse, a Republican on the Manatee County Commission.
Manatee County, south of Tampa, has a median home sale price of $422,000, according to Redfin. While the region is home to wealthier pockets along its Gulf Coast, it doesn’t have the same tight clusters of expensive homes as areas like Miami and Palm Beach. That will put pressure on local leaders to find other sources of revenue.
“We can do things like park fees, boat launch fees,” said Kruse. “Our buses are currently free, but we’d have to start charging bus fees — and that starts hitting the very people we’re trying to help.”
Kruse said police salaries could also be affected and that law enforcement would need to make its equipment last longer. “That five-year-old police cruiser will have to stick around for a few more years,” he said.
Taxing the Rich
The DeSantis plan is in part a calculation that affluent residents with highly valued properties and homeowners who don’t live in the state full-time will shoulder more of the cost of public services. Other states have also sought to increase the tax burden on wealthy out-of-towners, including New York, where the legislature this week passed a new levy on pricey second homes in New York City.
“In Palm Beach, they’re sitting on a gold mine,” DeSantis said at a news conference Wednesday. “They’ve got all these people who live there three months of the year and they buy $25 million homes.”
“That should be your tax base,” DeSantis said.
Florida counties like Palm Beach and Miami-Dade have numerous homes worth more than $250,000 and even $500,000, meaning they likely won’t face as sharp a decline in revenue. In Palm Beach, billionaire Ken Griffin was billed $10 million in property taxes last year.
Thomas Brosy, a senior researcher at the Tax Policy Center, said the DeSantis plan “could actually in practice be a way for taxing the rich” if local governments shift more of their tax burden to the most valuable properties.
Next week’s special session is likely the Republican-controlled legislature’s last with DeSantis as governor. While DeSantis enjoyed near-lockstep support from lawmakers during his first term, his relations with the legislature have been more contentious since his failed 2024 run for president.
