Proposed Homestead Tax Exemption Casts Shadow Over City Budget Talks

May 10, 2017

The City of Tallahassee is beginning budget talks for the coming fiscal year. Commissioners want to contrast their spending process with that of state lawmakers, which primarily took place behind closed doors. The board wants to continue investing in infrastructure and public safety. Mayor Andrew Gillum says that could come in the form of social services.

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“I think you’ll also see us trying to look around the bend at what are some of those more comprehensive ways of dealing with this issue…to include what we’ve been doing on summer jobs…making them available to the communities that need them most,” Gillum said.

Commissioners hope to get feedback from city residents over the next few months. Public meetings on the budget are scheduled for June 14th, July 19th, September 13th and September 27th.

But there’s a cloud hanging over the proceedings. A proposed ballot measure increasing the homestead tax exemption could force the city to cut back on popular services.

Before leaving town, Florida lawmakers agreed to give homeowners the chance to reduce the taxes they owe based on their property values. The change would allow residents to exempt up to $75,000 on the value of their home. The current upper limit is $50,000. But without that tax revenue, local governments say their public services could suffer, says Tallahassee City Manager Rick Fernandez.

“The impact to the city we estimate today to be two, two and a half, three million dollars. Obviously as property values increase, that number becomes greater,” Fernandez said.

He says the change wouldn’t help renters and low income property owners.

“The exemption doesn’t kick in until the valuation on the home is over $100,000. So if your home is valued less than $100,000, this exemption does nothing for you,” Fernandez said.

And if your home is worth more than $125,000?

“A 25,000 exemption translates to about $10 a year,” he said.

Ten bucks doesn’t sound like a whole lot. But for the city, it adds up quickly. Commissioner Curtis Richardson says local officials need to start educating residents now on what the change would mean for them.

“There will be those out there, as we see every year that say ‘well just expenses by $2 million’. Well that’s easy for them to say. But the hard work is going to come here,” Richardson said.

Fernandez says the city would protect spending for infrastructure and pensions. Commissioners would have to adjust, either by cutting services or raising taxes elsewhere. Fernandez says that could threaten what people love about the city.

“To have a place like Cascades Park that looks the way it does...to have the Asian Festival, to have the Caribbean Festival. People want to do that. They want to engage." Fernandez said. "To start to lose those things, then we start to become other places that we chose not to live in.”

The change isn’t set in stone yet. The measure will go on the 2018 ballot, and needs the support of 60% of voters to pass.