Lawmakers have filed eight property tax reform proposals, despite Florida’s legislative session not officially commencing for another week. St. Petersburg officials are already preparing for any changes.
City Council Chair Lissette Hanewicz explained the process and potential $83 million fallout in a Dec. 10 letter to constituents. She and her colleagues approved Councilmember Mike Harting’s request to complete a related “budget stress test” the following day.
Harting said his undated committee discussion should identify subsequent budget impacts, “core competencies that should remain fiscally intact” and programs that “would need to be reduced or eliminated” following the loss of property tax revenue. Officials will “have to make some choices” if the proposed changes come to fruition.
“I think it’s prudent at this point for us to at least talk about it,” Harting said.
Multiple colleagues applauded the request. While state officials could “say a bunch of things and do nothing,” Councilmember Richie Floyd said the stress test is still a useful exercise that would help inform residents.
Hanewicz said most people “do not understand the huge impact” a reduction in property tax revenue would “have on them personally, and the level of service they would receive from the city.” She believes it is crucial to “have those conversations sooner rather than later.”
Gov. Ron DeSantis has championed efforts to reduce or eliminate property taxes, particularly on homesteaded properties that are primary residences. As of July 2024, 58% of 107,988 homes in St. Petersburg have that distinction.
A percentage of a homesteaded property’s value is exempt from taxes. The designation also caps the annual increase on assessed values and resulting tax bills.
“On the surface, it sounds appealing,” Hanewicz wrote in her letter. “Who wouldn’t like a lower tax bill? But think about it. Without property taxes, how do we continue to fund essential services …?”
She noted that 97.5% of property taxes collected by the city fund the police and fire departments. Those revenues only cover 91.6% of St. Petersburg’s public safety costs after excluding required contributions to three community redevelopment areas.
The city’s general fund, which also supports parks, roads, libraries, social services and all other government functions, covers the remaining 8.4%. “When we need our first responders, we need them. Period.” Hanewicz wrote.
“We need these services to be reliable, especially in tough times, and we need to fund them in a stable, predictable way that allows us to anticipate our revenue stress to plan for the future.”
Mayor Ken Welch’s administration has projected that St. Petersburg would lose $83 million in annual revenue if all homesteaded properties became exempt from taxes. Hanewicz said that money would otherwise fund the police and fire departments.
All current proposals prohibit local governments from reducing funding for law enforcement. The legislation would also exempt school-related property taxes.
Those carve-outs would not extend to fire rescue and other first-responders services, including money for 911 dispatchers and emergency medical technicians. “There is no plan for how this lost revenue will be offset,” Hanewicz wrote.
She added that the state’s Long-range Financial Outlook, released in September 2025, projects a budget deficit of $1.5 billion in Fiscal Year 2027-28. That number balloons to $6.6 billion in Fiscal Year 2028-29.
“Any proposal to reduce or eliminate property taxes will involve a cost – whether it is a reduction of services or a shifting of those costs,” Hanewicz wrote. “I don’t want to see slower emergency response times, deferred maintenance, fewer services or a diminished sense of safety in our community.”
Implementing property tax reforms will not come easily for state officials. The legislature must first approve a joint resolution by a three-fifths vote in the House and Senate.
Republicans have a supermajority in both Florida chambers, and most stakeholders believe the passage of a property tax reform bill is a foregone conclusion. However, at least 60% of voters must then approve a constitutional amendment at the ballot box in November.
Welch recently told the Catalyst that he will ask voters to approve a new property tax that will support a general obligation bond issuance. The financing mechanism will fund “$600 million in stormwater and water projects to make us the resilient city that we need to be,” he said.