Fort Lauderdale leaders are preparing for a “worst case scenario” of a possible $100 million budget gap as Florida lawmakers debate slashing or eliminating property taxes and federal funding grants expire.
At Tuesday’s commission meeting, a discussion on the upcoming fiscal year’s budget ended up centering on what the city would do in the event that state lawmakers’ efforts to slash property taxes — a potentially major blow to Fort Lauderdale’s revenue — make it to the ballot in November.
“As we sit here today, my view is we need to be doing everything now to prepare for a worst case scenario,” said City Commissioner Ben Sorensen. “It’s not ‘the sky is falling,’ but we’ve got to be reasonable that there is a strong likelihood that we’re going to face significant deficits in our budget.”
Last month, the Florida House passed a bill seeking to repeal nearly all property taxes. Gov. Ron DeSantis has been pushing to eliminate property tax entirely and plans to deal with the issue later this year during campaign season to give Republican candidates a boost in the midterm elections. He showed interest in calling a special session on property tax “when the voters are watching” this July or August, he said last October.
But the House and Senate are at odds over the property tax issue, potentially throwing a wrench in DeSantis’ plans. Both chambers of the legislature need to pass the same joint resolution to get a proposal on the Nov. 3 ballot. If a property tax proposal does pass the House and Senate, Florida voters need to approve it by at least 60% for it to become law. The law would take effect Jan. 1, 2027, affecting the 2028 fiscal year.
Meanwhile, the City of Fort Lauderdale has been watching with unease.
Nearly 30 percent of the city’s ad valorem revenue, about $72.8 million, comes from homesteaded properties, said assistant city manager Yvette Matthews at the Tuesday meeting. All of that money — which makes up 14 percent of the city’s general fund — is at risk.
City staff are monitoring all property tax proposals moving through the legislature, including the bill approved in the Florida House, said city spokesperson Belal Jaber. “These are current projections as the bill stands today, there could be additional modifications as it moves through the process,” Jaber said in an email.
But losing property tax revenue isn’t the only budget concern. The city is already anticipating a roughly $20 million deficit in 2028, in part because that’s when a federal grant that allowed for the hiring of additional firefighters runs out, said city manager Rickelle Williams. That means in a few years Fort Lauderdale might be in the hole for about $100 million, depending on if Florida voters axe the property tax, Sorensen said.
Williams told city commissioners her staff is preparing for a significant deficit ahead of time, though it is unclear what may happen in the legislature.
“We are already engaging in some exercises at the department level to identify where we could see some cost savings. But to get to the $100 million nightmare scenario, we’re going to have to make some very strategic decisions,” Williams said. “I believe that we will have to potentially sacrifice some of the services that we offer or find opportunities to generate revenue that we have not yet pulled the trigger on or leveraged. I think that scenario will lead us to making some dramatic changes in the way that we operate and staff as a city.”
“Unless we decide to raise taxes,” said Mayor Dean Trantalis.
“Which I’m not interested in doing,” Sorensen responded.
Commissioners have been hesitant to raise Fort Lauderdale’s relatively low municipal taxes — even if it means balancing the budget. Last year, when a financial expert hired by the city encouraged leaders to increase the tax rate, elected officials pushed back on the idea, the Sun Sentinel reported.