The Republican Party has a lock on the state’s capital, a supermajority. Still, its elected leaders couldn’t agree during the 60-day legislative session on a new budget. Nor did they agree to Gov. Ron DeSantis’ request to put a controversial property tax question on the November ballot.
DeSantis wants a vote on eliminating property taxes for homeowners. But the “ad valorem” taxes on homesteaded properties are the income lifeblood for cities, towns and villages. They fund essential services for residents, as well as money for unique special events – think the Fourth of July parade in Key Biscayne.
Municipalities — including Key Biscayne — are in a hope-for-the-best, but prepare-for-the-worst scenario. A special session will take place next month, and another special session on property taxes is said to be in the works.
If a proposal in the House gets its way, the immediate impact on Key Biscayne’s budget would be $11 million – a third of the Village’s ad valorem revenue, Village CFO Benjamin Nussbaum told the Council at the March 10 meeting.
“If we have a special session, anything can happen, and any deals can get cut,” Key Biscayne Mayor Joe Rasco warned. “So it’s still a bad situation for cities like ours that depend on ad valorem taxation.”
Adding insult to injury, Key Biscayne doesn’t even have a voice in the House. DeSantis refused to schedule a special election after Rep. Vicki Lopez was appointed to the Miami-Dade Commission.
There is presently a standoff between the House and Senate, a GOP v. GOP cage match while the lame duck governor plays referee — while eyeing another presidential run in 2028.
DeSantis heaped criticism on the House this last session, calling lawmakers’ proposals “milquetoast” after they offered several routes to address property taxes. The House responded with what some see as a draconian approach, a bill that would eliminate property taxes immediately – not phase them out over 10 years as originally proposed.
The Senate rejected the House proposal and even DeSantis said, “Better do it right than quick.”
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The top proposition is for a 10-year phased elimination of all non-school property taxes. It would effectively halve the average tax bill by 2037 by exempting primary residences from most city and county levies.
The current House plan includes a constitutional prohibition that prevents local governments from reducing their total funding for law enforcement, firefighters, and first responders.
The state’s own estimates put the total revenue loss for municipalities at over $18.5 billion.
“It’s as though Tallahassee is deconstructing the recipe of what success looks like, and then just deteriorating what quality of life will be in cities,” said Michelle Heiser, town manager for Ocean Ridge in Palm Beach County – which like Key Biscayne is an oceanfront bedroom community.
A Florida League of Cities study released in December detailed how eliminating or sharply reducing homestead property taxes would create sweeping fiscal disruptions and weaken essential services. It found that the exemptions disproportionately benefit owners of high-value homes, slam renters, new homes and commercial properties and hurt rural communities.
Charles Chapman, legislative advocate for the organization, said any ordinance on the ballot would affect the 2027-2028 fiscal budget for municipalities.
“I think there’s so many different things that they (lawmakers) could possibly do that it’s hard to really nail down what the actual path will be moving forward,” he said.
In the meantime, Chapman said municipalities are scrambling. One municipality is considering charging an entrance fee to the dog park.
FILE – Benjamin Nussbaum, the Village of Key Biscayne’s chief financial office, speaks to Village Council. (KBI Photo)
Nussbaum told the Council to buckle up, suggesting the Council prioritize its major projects during its May strategic session.
“There are going to be some difficult decisions coming up for the Council to make,” he said.
State lawmakers have vowed not to cut funding for police and fire, but everything else would mean municipalities would have to go to Tallahassee on bended knee to get money.
At the March 10 meeting alone, the Council approved $215,000 for a Community Center assessment and feasibility study; $248,000 to replace 15 aging traffic calming devices and nearly $69,000 in additonal dollars for the renovation of the Building and Zoning office.
“A lot of things that we talked about here tonight, we couldn’t do if something like this would take away all our ad valorem taxes,” Rasco said.
Miami-Dade Mayor Daniella Levine Cava visited Virginia Key Tuesday to cut the ribbon on a $210 million upgrade to the Central Waste Water Treatment Plant. She said the County could see a hit anywhere from $150 million all the way up to $1 billion per year.
“Our general fund revenue is only $3.3 billion overall. So it’s a very substantial amount of money that could possibly affect transit, road repairs, animal services, libraries and fire,” Levine Cava said.
“And while they say law enforcement would be kept protected, they would also hold it at a rate of this year’s budget, which would mean there would be no opportunities for increased expenses or salaries, things that would naturally normally be included.”
New Miami Mayor Eileen Higgins campaigned against the property tax initiative. “We have to remember that 70% of the people who live in our city are renters, so only working on property taxes for homestead owners does not help people who are renters,” she said at a candidate forum last October.
For any initiative to pass, it would need 60% approval. The North Florida’s Public Opinion Research Lab (PORL) released a poll this month showing that among likely midterm voters, 56% are for gradually eliminating taxes on homesteaded property over 10 years – not counting taxes for schools and emergency services.
In the meantime Desantis and the Republican supermajority has put municipalities in limbo as they head into early budget preparations.
“We’re monitoring developments closely,” Nussbaum said.
Levine Cava said the county has already made substantial budget cuts to make up for a $400 million shortfall by combining departments, not filling vacancies and other measures.
“We already cut to the bone in this last year.” she said. “We are looking at contingencies that will, at this point, have to cut basic services that people rely on.”
The Independent’s Tony Winton contributed to this report.
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JOHN PACENTI is a correspondent of the Key Biscayne Independent. John has worked for The Associated Press, the Palm Beach Post, Daily Business Review, and WPTV-TV.