A property tax reduction that would provide relief to homeowners, but hamstring local governments was top of mind for several panelists at Hillsborough County's fifth annual State of the Market event on Wednesday.
The event took place at Ybor City's Cuban Club and was moderated by Hillsborough County property appraiser Bob Henriquez.
Real estate professionals and policy analysts weighed in on the future of the Tampa Bay region should an amendment reducing property taxes for Florida homeowners pass in November.
The amendment seeks to increase the existing $50,000 tax exemption for homestead properties to $150,000 in 2027 and to $250,000 in 2028.
School taxes will not be affected by the reduction.
Another part of the proposal would lower the cap on annual property tax increases for non-homestead properties from 10% to 5%.
Though the governor said the proposal would save Floridian's money, state economists project local governments could lose nearly $5 billion in tax revenue the first year and nearly $12 billion in the fifth year.
That money funds critical services such as police, fire and parks.
"Let me assure you that if that property tax reduction is voted in ... the fees will come from some other place," said Mayor Jane Castor, who opened the panel. "You're going to be paying assessments for everything."
Not only will that cost somehow get passed onto existing homeowners in the way of higher fees elsewhere, but developers are predicting people and businesses will be discouraged from moving to Florida.
"It's not going to get any cheaper to run a municipality, and to the contrary, it's going to get more expensive," said Trey Korhn, director of the commercial real estate lending division at Valley Bank.
Julia Silva, who is an industrial real estate broker in the Tampa Bay Region, said the burden will shift onto developers.
"They're going to have to change their underwriting and figure out their returns," said Silva.
In the last decade, the Tampa Bay Region has grown at a rapid pace. But Korhn said if there is "no tangible solution" to cover the revenue loss, it's hard to gauge the impact to the commercial industry.
"Who's going to absorb that? Those are the unknowns," Kohrn said.
Henriquez said Hillsborough could lose approximately $500 million in property tax revenue based on the 2025 tax roll— most of which is used to fund public safety.
"It's a significant loss of revenue should this amendment pass over the first two years of its implementation," said Henriquez, "there will be some tough decisions that would have to be made when you fund core services."
In terms of the county raising the millage rate in order to make up the gap in tax revenue, Henriquez said the move would be politically unpopular.
Another key provision of the amendment reserves the tax benefit for only current homeowners and those who move to Florida by the end of the year.
Those who arrive later, will have to wait five years for the tax relief to kick in.
Jeff Brandes, president of the Florida Policy Project and former state senator, said this essentially "creates a second class of Floridians," and will push potential new residents away.
"It is a huge disincentive," said Brandes, adding that it's likely unconstitutional.
"Courts have traditionally thrown that out. I'm not sure what they were smoking in Tallahassee – medical or not – to put this in," said Brandes.
Another unintended consequence that could arise, Brandes said, is the loss of local control in the event the state creates a statewide fund to help local governments pay for essential services.
"Well, that means if Tallahassee is paying the bills, Tallahassee is making the rules," he said, "what we're doing is moving from independent cities and counties to dependent cities and counties."
