A new report is warning that the impact of the Legislature's efforts to cut property taxes could lead to a "dramatic erosion of municipal revenue" in Broward County.
Property tax reform will be a major issue for the session, which begins Jan. 13, and a number of bills and joint resolutions have already been filed to address the issue.
The report — "Impact of Property Tax Reform on Broward County Municipalities" — looks at how each bill affects each Broward municipality. It was authored by the Broward League of Cities in partnership with the Broward County City Managers' Association.
The report comes after repeated calls by Gov. Ron DeSantis for the abolition of property taxes on homesteaded residences.
Property taxes are the largest funding vehicle for local governments.
In Broward, property taxes account for 48% of a city's general fund on average. A property tax reduction would cause most Broward cities to drastically reduce services.
Speaking to the Broward Legislative Delegation last week, county Property Appraiser Marty Kiar said the property tax debate will be "one of the most consequential votes you'll ever take as a member of the Florida House of Representatives or the Senate."
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Generally, the largest portion of every municipality's general fund is spent on public safety, which includes police, fire and EMS services.
In Broward, public safety accounts of cities represent an average of 55% of their general fund. The property tax bills House legislators will consider would bar local government from reducing funding for law enforcement, meaning that budget cuts would have to come from other departments — like parks and recreation and public works.
Property taxes are also used to pay down debt and pay back bonds — the loss of those funds would significantly hurt a city's credit rating.
Below is a look at each House proposal and its potential impact on revenues of cities in Broward:
House Joint Resolution 201
HJR 201 would eliminate all nonschool district related property taxes. This would remove $110 billion in taxable value from Broward's municipalities.
This would affect each city differently. In Pembroke Park, which is almost all commercial buildings and has very few homesteaded properties, HJR 201 would only lose 1.3% of its revenue. However, heavily homesteaded cities, like Cooper City, Lighthouse Point, Southwest Ranches and Weston, would lose more than 50%. Parkland would lose more than 75%.
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Coral Springs, Miramar and Pembroke Pines would lose revenue equal to nearly 200% of their Parks and recreation budgets which the report says leads to "inevitably reducing or completely eliminating programming, events, and robust maintenance plans for playgrounds, splashpads, community centers, and ballfields."
In Hollywood, the revenue loss would equal the city's budget for its parks and recreation, public works, code enforcement, and beach safety departments combined.
House Joint Resolution 203
HJR 203 would gradually phase out nonschool district property taxes over the next 10 years.
The report says that this would soften the immediate impact, but "the end result remains the same: a dramatic erosion of municipal revenue."
This is because the rising annual cost of municipal services paired with the shrinking tax base would force municipalities to cut services before the phase-out is complete to maintain their budgets.
House Joint Resolution 205
HJR 205 exempts those 65 and older from paying nonschool-related property tax. The report points out that this would have significant impacts on the tax bases of cities in Broward County with higher populations of seniors. For instance, 23% of Deerfield Beach's population is 65 and older.
House Joint Resolution 207
HJR 207 adds a new homestead exemption for 25% of a home's assessed value. While milder, the report shows that Broward cites would lose on average around 11% of their revenue, and Cooper City, Lighthouse Point, Parkland, Southwest Ranches and Weston would lose more than 20%.
The report concludes by urging state leadership to work with municipalities to find solutions that "balance taxpayer relief with the need to sustain essential services."
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