One of the great mysteries of the property tax credit versus lower sales tax debate is how Florida will pay for either or both of them. For starters, there is approximately $12.3 billion of unrestricted cash on Florida's balance sheet as of the June '24 fiscal year. Unless you want to borrow money to cut taxes, the $12.3 billion is an automatic upper barrier to what is financially possible. House Speaker Perez (sponsor of the lower sales tax initiative) says his proposal will cost the State $5 Billion in lost revenues that theoretically will be made up in part by more sales transactions as a result of the lower sales tax.
On the other side, Governor DeSantis would like to use the $5 billion to cut property taxes for homesteaded Floridians. Using statistics from the Manatee County Assessor's office, approximately 41% of property values are homestead. Extrapolating this figure across the entire state (since the Florida Dep't. of Revenue has no such statewide figure) leaves a total of $23 billion in property taxes paid by homesteaded residents annually against total property taxes paid of $55.2 billion. Dividing the $5 billion of proposed relief by the $23 billion paid by homesteaders shows a property tax reduction of approximately 22% or $660 per homesteaded property -- quite a bit below the Governor's desire for a $1000 property credit.
The Governor and Legislature can get to a $1000.00 credit, but only by reducing Florida's unrestricted cash by an additional $3 billlion - leaving only $4.3 billion to deal with unexpected expenses and budget shortfalls. The tariff announcements of the past week which economic forecasters say portend a potential national/worldwide recession do not leave the Florida leadership with much room for error.
Mike Meehan, CFA, MBA April 5, 2025
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elizabeth.brown.cpa
Another example of typical B.S. from people who should (and do) know better. In the first place, the RP tax credit would help property owners and do nothing for non-property owners; the sales tax reduction would help everyone but is a major source of government revenue since Florida does not have an income tax. As usual, flap lips but brain not engaged.
Wednesday, April 9 Report this