During the December 10th city commission meeting, staff addressed the potential impact of property tax legislation. Beginning in fiscal year 2027, several proposed Florida House bills are expected to significantly reduce the city’s property tax revenue over the next decade. Staff noted that assuming a 3% annual growth in taxable property value, the combined effect of these bills is projected to result in an overall reduction of approximately $266.5 million by fiscal year 2036.

The Proposed Bills

House Bill 201 has the most significant impact on the City by eliminating all non-school property taxes for homeowners with homestead exemptions starting January 1, 2027. This measure is expected to reduce ad valorem revenue by approximately $266 million over ten years, with a decrease of $23.2 million in FY27 and ultimately $30 million by FY36. 

Because the proposed legislation holds Law Enforcement operations harmless, the associated revenue reductions would primarily affect Parks and Neighborhood Affairs, Public Infrastructure, and Housing Services.

The second-largest effect would come from House Bill 203, which proposes a gradual phaseout of non-school property taxes for homesteaded properties by increasing the exemption amount by $100,000 each year. The financial impact of this measure totals about $256 million over ten years, with annual losses growing from $15 million in FY27 to nearly $30 million in FY36. 

House Bill 205 targets senior homeowners by eliminating non-school property taxes for residents aged 65 and older who have a homestead exemption. With an estimated 5,600 qualifying senior-owned households in Tallahassee and an average taxable value of $170,000, this bill is projected to result in a revenue reduction of $45.7 million from FY27 to FY36. 

House Bill 207 would expand the current homestead exemption for non-school taxes to cover 25% of a home’s assessed value. This change would have a moderate but consistent impact, with revenue losses growing from $7.6 million in FY27 to nearly $10 million by FY36, totaling about $87.6 million over ten years. 

House Bill 209 offers an extra $100,000 exemption for homeowners with property insurance. This policy would have a relatively consistent fiscal impact, resulting in a $15 million annual revenue decrease, with slight reductions each year, for a total decrease of approximately $157 million over ten years. 

Finally, House Bill 213 makes technical adjustments to the annual growth caps on property assessments. The bill would reduce the 3% cap for homestead properties and the 10% cap for non-homestead properties to 3% and 15%, respectively, phased in over three years. The fiscal impact of this proposal is relatively small, starting at approximately $451,000 in FY27 and increasing modestly to $589,000 by FY36.