Florida's Best Worst Option

With the first day of Committee Weeks for the 2026 Florida State Legislation session getting under way today, I want to lay out the facts around what looks to be the single biggest focus of this session - the proposed elimination of property taxes in the State of Florida.

Property taxes represent what many consider the “best worst option” for funding local services. While no one enjoys paying them, they fund essential services that cannot be charged on a consumption basis - roads, sidewalks, streetlights, public safety, libraries, parks, and emergency services. You can’t swipe a credit card when a police officer comes to help you or when you need an ambulance.

When discussing property taxes, it’s crucial to separate fact from fiction and understand the complex reality of local government funding. The current debate around eliminating property taxes sounds appealing on the surface, but a deeper analysis reveals significant challenges and unintended consequences.

The push for elimination has been strong.

“If you’re a Florida resident, and you have a primary residence here, your homesteaded property, I think you should be able to own that free and clear of the government.”

Sounds great. You wouldn’t get a “rent” bill from your government and you’ll get all your services for free. The argument that taxes are unnecessary has been preceded by the DOGE efforts on core county spending – not police; not schools; not state spending of sales tax – just county, non-public safety, expenditures. Will that eliminate your payments and provide you with “free and clear” ownership? Will you no longer receive a bill from your government?

Let me break down the actual numbers using my own tax bill as a real-world example to show what’s really happening with your property taxes and where your money actually goes. When evaluating tax policy proposals, it’s crucial to look at the actual numbers rather than simply listening to political rhetoric.

Between 2020 and 2024, the property appraiser determined that my home’s market value increased by 81.6% - that’s a staggering 16.1% compound annual increase. However, here’s the key metric: the assessed value that I’m actually taxed on only went up 10.8%, which translates to just 2.6% per year. This is lower than even the 3% maximum threshold established by Florida’s Save Our Homes amendment, demonstrating how this protection actually works in practice.

When you look at the total millage rate for unincorporated Manatee County in 2024, it comes to an implied 15.45 mils (inclusive of non ad valorem fire taxes). This includes everything - SWFMD, WCIND, fire services, mosquito control, school board, and county operations.

But here’s what might shock you: only 2.78 mils of that total goes toward the entire operations of the county government. That represents just 17.4% of my total tax bill – the only portion being DOGE’ed. This means that 82.5% of my property taxes go to everything else: sheriff’s department, constitutional officers, fire services, schools, and other independent districts. The very things we’re told will not be touched by any tax cut proposals.

This breakdown reveals something important about the political discussions around tax cuts. When politicians in Tallahassee talk about reducing taxes, while promising not to defund police or impact school funding, they’re essentially focusing on only cutting that small 17.4% slice that funds county operations. That tiny portion covers ambulances, EMS workers, 911 operators, lifeguards, veteran affairs, librarians, transit operators, boat ramps, parks, soccer and baseball fields for your kids, and so much more. All of these essential services, the services that provide for our quality of life, are funded by less than 18% of my total property tax bill. So, if we eliminate every aspect of our local government, you’d still receive a bill for 82% of your current payment.

The reason my county portion is so manageable comes down to assessed value versus market value. In 2024, my assessed value is over $400,000 below my market value. That gap represents my built-in savings as a homeowner - my actual homestead exemption has grown from $93,000 in 2020 to over $400,000 today – and this entire amount (up to $500,000) is portable and can be used for savings on future homes for existing homesteaded residents.

If I were paying the same amount of taxes based on my actual market value, my effective millage for county services would calculate to only 1.15 mils.

Here’s where the numbers get really interesting when considering the cost burden for our home owners. My total property tax bill increased by just $213 over four years - a mere 4.4% increase, or only 1.07% per year during a period of significant inflation. Not remotely enough to cover the increased costs in providing the services I use as overall inflation has increased by 25% over this same period.

Compare that to my homeowner’s insurance, which jumped from $1,760 in 2020 to $5,804 in 2024. That’s a 230% increase, representing a 27% annual compound growth rate.

The contrast is stark. While my insurance costs increased by over $4,000, my property taxes - which fund virtually everything I use in the county - increased by only $213. Even my CDD fees, just to fund my subdivision, went up $650 - but my property taxes barely budged.

This comparison shows that property tax increases aren’t the primary driver of rising housing costs for homesteaded property owners.

The Save Our Homes protection is already providing substantial savings. If I had to pay taxes based on my home’s full market value, my 2024 tax bill would have been $12,000 instead of the $5,000 I actually paid. That’s almost $7,000 in realized savings without the state pushing to further increase my exemptions.

For existing homeowners, the current system already provides significant protection against rapidly rising property values. For new buyers, while they will start with taxes based on current market values, they’ll benefit from the same protections going forward. Interestingly, many new home buyers are coming from out of state - the very demographic that some politicians claim should bear a higher tax burden anyway.

What an elimination of property taxes won’t help, however, is the very affordability the state is touting as the reason for the proposals. Here’s where basic economics comes into play. The debate over eliminating property taxes in Florida has gained significant traction, with proponents arguing it would benefit overall cost of living. However, a deeper analysis reveals a more complex picture that challenges this narrative. While the proposal appears to offer relief to current property owners, the economic reality suggests the primary beneficiaries may not be who you’d expect.

To understand the true impact, we need to examine how home buyers make purchasing decisions. People typically buy houses based on their anticipated monthly budget - what they can afford to pay each month for their total housing costs. This includes mortgage payments, property taxes, and insurance. When you remove one component from this equation, buyers don’t suddenly have extra money; instead, they can afford to pay more for the house itself. This is why home prices typically go down when mortgage costs go up.

Consider a real-world example: my house, at the property appraiser’s market value of $774,000 and with a 6% mortgage over 30 years, combined with current property taxes and insurance, results in a monthly total housing budget of $5,548. If property taxes of $424 per month were eliminated, a buyer with the same monthly budget could now afford to pay $70,000 more for the same house - bringing the purchase price to $845,000.

This $70,000 increase represents 14 years worth of current property taxes that buyers would essentially prepay upfront. But here’s the crucial difference: instead of paying those taxes to local government for community services they can use and benefit from, that money goes directly to the home seller. The buyer still faces the same financial burden, just redirected to a different recipient.

These financial implications extend beyond the purchase price. That additional $70,000 requires a larger down payment - an extra $14,000 upfront for the typical 20% down payment requirement. This creates additional barriers for first-time homebuyers and those seeking affordable housing options. The remaining $56,000 must be financed, adding approximately $4,000 annually in interest charges at 6% - not far off from the $5,000 in annual property taxes that were supposedly eliminated.

Over the life of a 30-year mortgage, buyers would pay an additional $64,500 in interest alone. Combined with the higher purchase price, homebuyers end up paying the equivalent of 26 years worth of property taxes to banks and sellers rather than to their local government. The situation becomes even more pronounced if mortgage rates drop to 3%, where the home price could increase by $100,000 - equivalent to 20 years of property taxes paid directly to the seller.

The real winners in this scenario are the developers. Without property taxes factoring into buyers’ monthly budgets, developers can increase home prices to offset annual funds that would have been allocated to taxes, while further capitalizing on the inevitable increased demand from out-of-state buyers.

This represents a massive transfer of wealth from local government coffers to private developers’ profits. That wealth, which could have funded libraries, parks, infrastructure, and public safety over many years, instead flows directly to developers as increased profit margins. Meanwhile, housing affordability decreases further as home prices rise to absorb buyers’ full budget capacity.

The elimination of property taxes doesn’t create genuine savings for homeowners and homesteaded properties. Instead, it orchestrates a significant shift in how housing costs are allocated. Rather than paying local government for essential community services, the same money flows to banks through higher mortgage payments and to developers through inflated home prices. This benefits out-of-state buyers and developers at the expense of the very communities these property taxes are designed to serve.

The irony is stark. In attempting to reduce the tax burden on residents, this policy would likely make homeownership less affordable while simultaneously reducing funding for the quality-of-life services that make communities desirable places to live.

Before supporting such measures, residents should carefully consider whether they’re truly receiving tax relief or simply redirecting their housing costs away from community investment and toward private profit.

So who ultimately benefits from eliminating property taxes? Current homeowners do receive a reduction in their tax burden while remaining in their homes, but they’re also losing the services those taxes fund. Current homeowners would see savings on their tax bills, but the moment they decide to sell or upgrade, they’ll face the harsh reality of inflated home prices without the benefits of the current Save Our Homes tax portability - thus leveling the purchasing field with non-homesteaded, out-of-state buyers.

In light of these realities, do all residents truly want zero taxes? Here’s a fascinating contradiction to the “people hate taxes” narrative. In 2024, the residents of North Dakota were asked to vote on an elimination of property taxes substantially similar to what’s being discussed in Florida. In spite of the narrative, the votes educated themselves on the negative aspects of the proposal and overwhelmingly (63.5%) voted against the ballot initiative.

Locally, in Manatee County, we’ve seen similar outcomes. Since 2020, there have been nine local ballot initiatives asking voters to voluntarily increase their taxes. All nine passed – including three fire district millage increases, two fire mergers resulting in higher taxes, a school board 1.0 mil increase (past twice - most recently in 2024 with 82.6% of the vote), an increase in tourist taxes, and a countywide 0.15 mil increase for the acquisition of conservation land.

Every single time voters in Manatee County were asked to pay more for a safer, better quality of life — for conservation, fire protection, schools — voters said yes. This doesn’t align with claims that people want no taxes. What people want is a good quality of life and the assurance their money is spent wisely.

So, as you can see, while property taxes have become a hot-button issue in Tallahassee, the conversation goes far deeper than most people realize. The challenges we face aren’t just about setting tax rates – they’re about a broken system that limits local government’s ability to generate revenue from multiple sources, forcing an over-reliance on the property taxes that are paid by property owners for the services they desire.

Local governments face significant constraints on alternative revenue sources. Gas taxes aren’t indexed to inflation, so they buy less road maintenance each year while electric vehicles pay nothing toward road upkeep. Sales tax revenues largely flow to the state - six of seven cents collected in Manatee County go to Tallahassee, not local operations. Impact fees face state restrictions, forcing localities to bond for infrastructure costs with your property taxes footing the bill. Tourist development taxes require jumping through regulatory hurdles for each increment, with specific use restrictions that prevent their use for general operations.

When local government can only control one major revenue stream – property taxes - it forces more pressure onto those taxes paid by residents and businesses.

This isn’t just a local problem – it’s a systemic issue that requires serious reform. Until we address these revenue limitations, as well as closing the loopholes that allow valuable properties to escape fair taxation through greenbelt exemptions and other accounting tricks, operating costs will continue to fall disproportionately on residents and property owners. The solution isn’t just about property tax rates; it’s about creating a fair and comprehensive revenue system that works for everyone.

Instead of eliminating property taxes and creating unintended consequences, a more thoughtful approach would create a better, more sensible, path forward.

• Index gas taxes to inflation so road maintenance keeps pace with costs and usage;

• Allow local governments to retain more of the current 6% state sales tax revenue rather than substantially, and regressively, increasing them to the reported 12% that would be necessary to replace property taxes;

• Remove restrictions on impact fees so new development pays its fair share;

• Streamline and create flexibility for the use of tourist development taxes so visitors contribute more for the infrastructure they use;

• Consider reforms like land value taxes that encourage land use efficiency;

• Address greenbelt exemption abuse where developers use token agricultural use to avoid taxes on valuable rezoned land.

If we don’t consider the alternatives, and the focus continues to be solely on the elimination of property taxes for political points, several problematic dynamics will inevitably occur.

Florida’s explosive growth has been making headlines but imagine what would happen if the state eliminated property taxes entirely. Advertising “no property taxes” would attract a massive population influx from high-tax states, exacerbating housing affordability and displacing current residents. With a socialist mayor about to be elected in New York and ever-increasing taxes in Chicago, such a move would trigger an unprecedented migration that could fundamentally reshape the Sunshine State.

This influx would create two possible scenarios, neither particularly appealing for current residents. First, newcomers with deeper pockets could buy up existing homes, displacing long-time residents who can no longer afford to live in their own neighborhoods. Alternatively, Florida would need to construct massive amounts of new housing and supporting infrastructure at breakneck speed.

The infrastructure challenge alone would be staggering. New residents require schools, hospitals, roads, utilities, and countless other services. Without property tax revenue to fund these necessities, the state would face a critical funding gap. The result? Either dramatically increased state sales taxes and local consumption fees for existing services or a significant decline in service quality and overall quality of life.

Eliminating property taxes would create several significant problematic dynamics beyond the this influx of residents.

• Decreases in local services, public safety, and quality of schools. The overall safety and the quality of life of Florida residents are best determined locally and a dramatic cut in the very resources presently used to provide these benefits would be felt immediately and significantly.

• Tax shift. Elimination of homestead-only property taxes would create a tax shift rather than a tax cut. The burden of providing the revenue necessary for local government would be further borne by non-homesteaded residential properties and commercial properties, which will inevitably be passed on through higher multifamily rents, higher consumer prices, and higher commercial rents to small businesses.

• Price Shift. Home prices would increase exponentially compared to property tax savings. You’re not eliminating the cost; you’re shifting it from government services to private profits for developers and banks.

• Upfront Cost Burden. Higher home prices mean larger down payments and mortgages, making homeownership less accessible initially while providing no tangible long-term savings.

• Revenue Centralization. Alternative replacement funding through state-level taxes or fees would flow revenue to Tallahassee, requiring every local government, sheriff, and school board to “go hat in hand” to the state for funding, further consolidating oversight away from local control and adding unnecessary, and potentially unwanted and damaging, strings to any funding request for a return of the very dollars which originate locally.

Property taxes, while imperfect, are still the “best worst option” and remain the most stable and locally-controlled funding mechanism for essential services. The current system already provides substantial homestead protections and the actual tax increases for homesteaded residents have proven to be modest.

Rather than elimination schemes that would shift payments and profits to banks and developers, while consolidating power in Tallahassee, we need thoughtful reforms of the broader revenue system to better serve our taxpayers and continue improving our service quality while allowing local governments the flexibility to voluntarily lower taxes as realized alternative revenue streams offset the current tax needs.

The elimination of property taxes might sound appealing on the surface, but it represents a shell game that ultimately benefits the private sector at the expense of public services. This creates a perverse outcome where the same money that once funded your public services, schools, and public safety now flows to home sellers, developers, and banks. Florida’s growth story is compelling enough without creating a policy framework that prioritizes profits over the infrastructure and services that make communities livable.

Ultimately, property taxes are more than just a line item on a bill. They represent a carefully balanced mechanism to both fund a wide array of public services and manage the fiscal realities of serving a dynamic, growing community. The data shows that property taxes aren’t the villain in your cost of living story—insurance costs, housing prices, and overall inflation are having much bigger impacts.

As debates continue over potential changes, any strategy that undermines the property tax system risks destabilizing the delicate equilibrium that funding public services depends on. Rather than viewing property taxes as an arbitrary burden, it is essential to recognize them as the foundation for maintaining your quality of life, ensuring local government fiscal stability, and supporting the communal services that make Manatee County a vibrant, thriving place to live, work, and play!

George Kruse is Chair of the Manatee County Commission and its District 7 commissioner. This article originally appeared on his Substack blog. Click here to subscribe.