A State Puts Property-Tax Cuts on the Ballot This Fall—But Shields Schools

One of the nation’s largest states will place a major property-tax relief measure before voters this fall.

But after a significant change by Florida lawmakers to a proposal from Republican Gov. Ron DeSantis, school districts have been protected from a reduction to one of their major revenue sources.

Backlash to a national surge in property-tax bills has spurred proposals in a number of states alongside Florida in recent years to diminish or outright eliminate the local taxes that account for about a third of public school spending nationwide.

But the Florida legislature’s decision to limit the scope underscores that bringing about fundamental change to property taxes as a foundational source of school funding is challenging.

Nearly half of school district funding in Florida comes from local property taxes, said Joe McGehee, the director of advocacy and legislative services for the Florida School Boards Association.

“I haven’t had a member say they aren’t relieved” by the Republican-controlled legislature’s decision to limit the scope of property-tax reductions, he said.

About a dozen states across the country have entertained proposals with similarities to Florida’s, said Nicole Fox, a policy analyst with Tax Foundation, a Washington-based nonpartisan think tank on tax policy.

“But they’ve mostly gone nowhere,” she said.

One example: In North Dakota, almost two-thirds of voters in 2024 rejected a ballot measure that would have amended the state constitution to ban property taxes.

In Florida, even after school taxes were carved out, the plan that will go before voters in the fall “is very significant,” Fox said.

Fox and her Tax Foundation colleague Katharine Loughead conclude in an analysis that the Florida plan “would shift property tax burdens in highly distortionary ways and make Florida’s tax code far less stable and competitive.”

School tax changes a bridge too far for lawmakers

DeSantis has pushed property-tax elimination for more than a year.

“The property tax has become a big, big burden for millions of people in this state,” he said on June 1 in highlighting his proposal, which would have expanded the homestead exemption for property taxes from the current $25,000 to $150,000 in 2027 and $250,000 in 2028. (The homestead exemption shields a designated amount of property value of a homeowner’s primary residence from property taxes.)

DeSantis discussed why he included school property taxes in the plan at the June 1 appearance in Land O’Lakes, Fla.

“The state of Florida, in my tenure, we’ve taken on more of the burden for school districts than before I was governor, increasing [funding] percentages,” he said. “We’ve increased funding every year for them. You know, you have some of these school districts that have had a decline in student population, and yet they’ve had massive, massive [spending] increases.”

But lawmakers, called into a special session by DeSantis to consider the property-tax measure, quickly moved to carve schools out of the plan.

“I for one can’t support removing billions of dollars from public education today,” state Sen. Jay Trumbull, a Republican from Panama City who made the motion, said on June 1, according to the Tampa Bay Times.

The property-tax plan, with school taxes shielded, passed the legislature on June 2 and will require approval from 60% of voters in the fall to take effect. It will gradually raise the homestead exemption for property taxes that fund county, city, and certain other local government units. But the homestead exemption that applies to property taxes that fund school districts will remain at the current $25,000 level.

The Tax Foundation’s King said voter approval of the plan would require the state to rethink how it funds government services because homestead property accounts for 36.1 percent of the taxable value of all real property in Florida.

“Eliminating such a sizeable share of Florida’s property-tax base would not reduce the cost of providing local government services,” she said. “It would simply require that the lost revenue be generated elsewhere, including from higher millage rates on all property that remains taxable.”

McGehee of the Florida School Boards Association noted that while nearly half of school district revenue statewide comes from local property taxes, the ratio is much higher for some districts—as much as 80% in some.

“Saying that we’re just going to cut that funding, that left many questions,” he said.

Florida school boards would support “any thoughtful approach to legislation” rethinking property taxes and funding of government services, McGehee said.

“Florida’s constitution was framed with property taxes in mind as a stable and reliable source of continuous funding,” he said. “Changing that quickly is hard.”