Tax reform jitters are spreading through cities across the state as legislators move forward with a plan set in motion by Gov. Ron DeSantis to give homesteaded property owners a much-needed tax break.<\/p>\n
Fort Lauderdale officials say they are well aware of the fiscal fallout that might be coming and are already making plans for what could be a worst-case scenario: A staggering $72.8 million shaved from the city\u2019s day-to-day budget.<\/p>\n
DeSantis has called for the elimination of property taxes, referring to them as a burden that forces homeowners to pay perpetual \u201crent\u201d to the government.<\/p>\n
Property tax reform would require a constitutional amendment passed by 60% of the voters.<\/p>\n
If voters approve tax reform in November, cities across the state would likely have no choice but to slash budgets, with one caveat. They\u2019d be prohibited from cutting spending on fire-rescue and police departments below current levels.<\/p>\n
Vice Mayor John Herbst has told his colleagues he has no doubt<\/a> the tax reform proposal is going to pass.<\/p>\n \u201cWe need to be leaning into the fact that we\u2019ve got to start scaling down operations,\u201d he said last month. \u201cWinter is coming. Let\u2019s just not put our heads in the sand.\u201d<\/p>\n Commissioner Ben Sorensen echoed that refrain during a recent City Hall meeting, urging staff to be prepared now for what might be coming down the pike.<\/p>\n \u201cWe need to be doing everything now to prepare for a worst-case scenario,\u201d Sorensen said. \u201cIt\u2019s not the sky is falling, but we\u2019ve got to be reasonable that there is a strong likelihood that we\u2019re going to face a significant deficit in our budget.\u201d<\/p>\n Sorensen asked how the city would handle an extreme drop in property tax revenues.<\/p>\n Fort Lauderdale\u2019s budget team has been evaluating various scenarios, City Manager Rickelle Williams told the commission.<\/p>\n \u201cOur mindset is geared toward (the fact that) anything could happen,\u201d she said. \u201cWe can\u2019t predict what the Legislature will do. What I\u2019ve shared with our budget management team is that our focus is going to be on fiscal prudence, resourcefulness and innovation. We just don\u2019t know what the true impact might be.\u201d<\/p>\n Last year, the city\u2019s financial consultant shared a grim financial forecast that did not even contemplate the potential of property tax reform.<\/p>\n At the time, Mayor Dean Trantalis dismissed the gloomy prediction as a worst-case scenario<\/a>.<\/p>\n \u201cWe don\u2019t need to take on these doomsday attitudes,\u201d Trantalis said at the time. \u201cWe may have to cut corners in some of our programs. We\u2019ll see how the numbers shake out and go from there.\u201d<\/p>\n According to the forecast from city consultant Stantec, the shortfalls would grow each year as budget expenses rise and property values level off: $38.4 million in 2027; $47.2 million in 2028; $61.3 million in 2029; $54.2 million in 2030; $59.1 million in 2031; $75.6 million in 2032; $86.5 million in 2033; and $107.1 million in 2034.<\/p>\n Based on staff\u2019s current estimate, Fort Lauderdale is facing a $28 million deficit in fiscal year 2028. In the most extreme scenario, property tax reform could increase the shortfall by another $72 million.<\/p>\n \u201cThat\u2019s possibly a $100 million deficit if the worst-case property tax proposal passes,\u201d Sorensen said. \u201cThis is a huge number. Share with me how we start thinking about this and how we start preparing for a worst-case scenario.\u201d<\/p>\n The city manager said Fort Lauderdale is preparing for that scenario, just in case.<\/p>\n \u201cI believe 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,\u201d she said. \u201cThat scenario will lead us to making some dramatic changes in the way that we operate and staff at the city.\u201d<\/p>\n Last year, the city was bracing for possible shortfalls based on an anticipated drop in property tax revenues, Bill Brown, chair of the city\u2019s Budget Advisory Board, told the South Florida Sun Sentinel.<\/p>\n \u201cThen the property tax reform came up,\u201d Brown said. \u201cWe were already preparing for a shortfall. And the tax reform just compounds it.\u201d<\/p>\n The 10-member Budget Advisory Board meets monthly to provide input on the city\u2019s annual operating budget, analyze financial data and brainstorm ways<\/a> to bridge projected budget shortfalls.<\/p>\n