Palm Beach County’s top government officials agree: If voters in November approve a plan to cut property taxes, the lost revenue will have to come from somewhere.
With the county projected to lose hundreds of millions of dollars, the officials are raising concerns about county employee layoffs, service cuts and the potential for rents to increase. They say they’re also concerned local governments across the state may end up relying on money from Tallahassee to stay afloat.
At a recent Coalition of Boynton West Residential Associations meeting, County Administrator Joseph Abruzzo said “multiple municipalities will fold.”
Abruzzo said he believes between eight to 10 municipalities could dissolve if they lose property tax revenue. Those most at risk lack commercial property and already levy the maximum tax rate, leaving them with limited options for alternate revenue sources.
“This is not a tax cut. This is a tax shift,” Abruzzo said at the COBWRA meeting. “It just depends on how we’re getting the money.”
For the November general election, Florida voters will decide whether to approve Amendment 3, which proposes increasing the state’s homestead exemption from $50,000 to $150,000 in 2027 and to $250,000 in 2028. The exemption would rise with inflation. To pass, it will need at least 60% voter approval. (Florida legislators in June adjusted the proposal to protect schools from property-tax cuts.)
Abruzzo recently joined County Property Appraiser Dorothy Jacks, Tax Collector Anne Gannon, state Sen. Lori Berman and state Rep. Anne Gerwig for a panel to answer questions and warn about the possible impacts.
The recent COBWRA panel was one of many conversations being held by local and state leaders about the property tax plan, which has drawn both opponents and supporters. Proponents of the plan say local governments should rein in spending and provide much-needed relief to homeowners who have been watching their property tax bills go up.
In early August, the Florida Sheriff’s Association said they were “significantly concerned” with the measure’s potential ability to control local budgets, create longer law enforcement response times and limit governments’ abilities to perform services such as road repair.
In Palm Beach County, concern about the proposal has mounted in recent months. During the Aug. 19 COBWRA meeting, Abruzzo said he has spoken to a “number of municipalities” that “will not be able to survive.”
In June, Jacks, the property appraiser, said the county’s “bedroom communities,” or those that lack diverse tax bases, could become insolvent.
According to revenue-loss predictions presented by Jacks during the COBWRA meeting, the county and its special taxing districts — such as fire rescue, the library system, the healthcare district, the Children’s Services Council and more — could lose more than $400 million in 2027 and nearly $600 million in 2028.
“There is a very large impact when we all bundle together,” Jacks said at the meeting. “I know it’s easy for all of us to say, ‘Well, I’m going to save money on my tax bill.’ … We all would, but when you start to bundle it, when you start to look at the larger picture, you see these bigger concerns.”
Statewide, there would be an estimated $45.8 billion reduction in local property taxes over five years, from the 2027-2028 fiscal year through 2031-2032, according to Florida Tax Watch, an independent taxpayer research institute.
Berman, a Democrat, pointed to the state’s Office of Economic and Demographic Research data, saying Amendment 3 would cut local property taxes by an estimated nearly $11 billion for fiscal year 2030-2031.
“Once you change the constitution, nobody wants to go back,” Berman said at the COBWRA meeting. “Whatever happens, it would be very hard to undo this.”
Gannon, the county tax collector, said her office would lose about $10 million in 2027 and about $15 million in 2028.
This, “in turn, would affect the county and the other taxing districts that we collect on behalf of,” Gannon said.
The problem, though, is that “these are all districts that you, the people, voted to allow the county to fund through property taxes, so it’s not clear, are they going to set up a special way to collect those taxes? A different kind of district to fund their services? … Those questions are not clear to us.”
What is clear, Gannon said, is that the tax collector’s office likely would have to terminate employees. She also said service appointments could be harder to get.
County Administrator Abruzzo believes there are three possible ways to manage the projected losses: service cuts, raising tax rates or raising sales tax.
Tax rate increases would primarily affect commercial properties, such as rentals, Abruzzo said.
For months, local leaders and real estate experts have cautioned about how renters could see higher monthly costs.
And even though the fate of the property tax proposal has yet to be decided, Abruzzo said the county put a pause on projects until the outcome is determined.
“Hundreds of millions of dollars of capitol improvement that have been brought to a screeching halt,” he said.
Statewide, nearly 30 counties are considered “financially constrained,” Gerwig, who is a Republican, said during the meeting. Those counties may need to get help from the state, she said.
Bigger counties with higher property values tend to be “donors” to the state, Gerwig said. And though she said she believes Palm Beach County “could make this work,” she does not necessarily want to see the county stretched any further.
“I just want to make sure that we are not becoming further donors, losing services that we are accustomed to,” she said. “If our governor thinks that socialism is a bad thing, asking South Florida to pay North Florida’s services, I don’t know how that’s different from socialism.”
COBWRA President Barbara Roth said August tends to be the “sleepiest” month for meetings, but turnout was much larger than expected.
Roth said about 200 people came to hear the panel. Usually, an August meeting might have about 130 attendees. Roth said some neighborhoods within COBWRA, such as Valencia Reserve and Bellagio, have reached out to the panelists about holding town halls within their communities.
“People learned a lot. They thought the presenters were extremely clear,” she said.
Read the full article by Abigail Hasebroock on the South Florida Sun-Sentinel