VERO BEACH — As a proposal to reduce or eliminate property taxes advances in Tallahassee, Vero Beach officials have begun examining what such changes could mean for the city’s finances, calling a recent special meeting the start of a broader public conversation.
“Our general fund budget for this year is $35,950,000, rounded up,” City Manager Monte Falls said. “Property taxes represent about 38.75%, $13,750,000.”
Falls noted the statewide average share of municipal budgets funded by property taxes is about 43%, slightly higher than Vero Beach’s. Still, he said, the revenue is central to city operations.
“Our police department budget is $13,400,000, which is essentially the amount we collect in property taxes,” Falls said.
Gov. Ron DeSantis has made property tax relief a priority for the November ballot, arguing that rapidly rising collections are burdening homeowners and discouraging prospective buyers.
At a recent press conference, he said property tax collections have grown from $32 billion to nearly $60 billion in recent years, estimating the earlier figure would be about $44 billion today when accounting for inflation and population growth.
The proposed constitutional amendment would require 60% voter approval in November to take effect.
DeSantis has outlined a two-part plan: a $1,000 statewide homestead rebate for the 2025 and 2026 tax years and a doubling or tripling of the state’s existing $25,000 homestead exemption.
According to an analysis by the Tax Foundation, a non-partisan tax-policy nonprofit, Florida has about 5.1 million homestead properties. A $1,000 rebate per homestead would total roughly $5.1 billion in relief over the two years.
The group characterized the rebate as a transfer of state revenue to homeowners that would not permanently change the long-term cost of homeownership.
The Tax Foundation also reported that doubling the first $25,000 homestead exemption tier would cost local governments an estimated additional $1.97 billion annually, with further increases if expanded again.
Because property taxes primarily fund local governments and schools, the report said reductions would likely require the state to shift billions of dollars annually to local governments to backfill lost revenue, raising questions about long-term sustainability.
Falls said eliminating or drastically reducing property taxes would shift costs elsewhere.
“It will be a tax shift that moves costs on full-time homeowners through higher sales taxes, new fees, and/or reduced local services,” he said.
Mayor John Cotugno said even a partial reduction could have visible consequences. Under a scenario in which property tax revenue dropped by 25%, he said the city could lose the equivalent of four to five police officers or other staff, scale back public works operations and delay road repaving and infrastructure maintenance.
“We’ve been catching up at a pretty decent pace over the last couple of years,” Cotugno said. “Now, all that would come to a halt.”
More significant cuts, he added, could affect beach patrols, free parking and boat launches.
“In that reality, all bets are off,” Cotugno said of a drastic reduction or elimination. “Without property tax revenue, there’s no other way that we can replace the revenue. Something is going to get reduced.”
Councilman John Carroll said the city receives about 17 cents of every property tax dollar collected, with the majority going to schools and the county. He said law enforcement costs in recent years have largely consumed the city’s property tax revenue.
Ken Daige, a former city council member and longtime resident, urged local leaders to maintain control over budget decisions.
“I don’t want us as the citizens to lose our rights,” Daige said. “We can come in here and talk to you about our budget. We can tell you our needs.”
Supporters of the governor’s proposal argue property tax growth has outpaced residents’ ability to pay and that structural changes are needed. The Tax Foundation noted that voter frustration with rising bills is real but suggested alternatives such as levy limits to cap year-over-year growth in collections, rather than full elimination.
Vero Beach officials said the special meeting was just the beginning of a months-long discussion. The League of Florida Cities has encouraged municipalities statewide to hold similar public sessions ahead of the ballot measure.
Falls said discussions will continue to explore scenarios and their impacts.
Should the policy make its way to the midterm elections in November, it will need a 60% majority for approval.