Florida, in response to soaring home owning costs, is considering eliminating property taxes. Rising home ownership costs, particularly property taxes and insurance are a national problem. See our blog posted February 5, 2025, “Can You Afford a Large Increase in the Value of Your Home?” Florida’s property taxes are estimated to approximate $55 billion for the current fiscal year. Property tax revenue will be difficult to replace, particularly in a state that doesn’t have an income tax. Efforts to limit property taxes are not new. Consider the wave of protests in the 1970s and 1980s, that gave rise to California’s Proposition 13 and Michigan’s Headlee Amendment, among others.
While there have been a number of suggestions for replacement of any lost property tax revenues, the alternatives, with scale, narrow down to increasing sales taxes and/or reducing expenditures for schools and public safety. It is interesting to note that one of the suggestions for replacing property tax revenues, is finding ways to gather more revenues from visitors to the state.
Investors should recognize that, at the end of the day, Floridians are going to pay, the question is, which group of Floridians is going to pay the most. Florida’s state tax revenue sources are already among the most regressive in the nation. Any increases in the sales tax could put further pressure on consumption.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
