The following op-ed was accepted for publication by a Florida paper but ultimately did not run, likely because there had already been so much Amendment 3 content. While it doesn’t break significant new ground, I’m sharing it here as a summary of the arguments against Amendment 3.
Additionally: tomorrow evening, I plan to host a free subscribers’ chat analyzing tax-related ballot measure results across the country. (Substack chats are limited to subscribers, so if you’d like to participate, please click the button below to subscribe to The SALT Road. It’s free.) I hope you’ll join the conversation, or at least follow along with the results and analysis!
Amendment 3 Would Shift Tax Burdens and Raise Costs
Amendment 3 promises Floridians billions of dollars in property tax relief, but it comes at a cost—for renters, future homeowners, and Florida’s economy. Despite being sold as an affordability solution, its real effects would be to make housing less affordable and government-funded services more expensive.
By raising the homestead exemption to $250,000 for non-school property taxes, Amendment 3 would reduce tax collections by $8.7 billion in 2027, rising to $11.8 billion by 2032.
City and county budgets serve local needs, with local tax revenues paying for things like local roads, law enforcement, emergency services, and hurricane responses. If Amendment 3 passes, local governments will have three options to address the revenue gap: cut services, increase fees, or raise property tax rates on the remaining tax base. Many jurisdictions will do all three, with some localities already exploring their options.
Under Florida’s levy limits, a locality’s property tax collections cannot increase year-over-year on existing property (excluding revenue from new construction) without a supermajority vote, and rate increase of 10 percent or more requires a unanimous vote of the local governing body. If Amendment 3 passes, local governments could raise rates substantially just to restore revenue neutrality. But if they declined to do so immediately, allowing property tax revenues to fall, that would reset the baseline. Most would require a unanimous vote restore pre-Amendment 3 revenue levels later.
This gives local officials a strong incentive to offset revenue losses with rate increases immediately, while it just requires a simple majority. When that happens, property tax burdens shift to renters, as well as to future homeowners.
If localities raised rates to backfill Amendment 3 losses, property tax burdens on the average Florida apartment unit would rise by more than $400, while taxes on a single-family rental home would increase by nearly $1,100 per year. Renters do not pay property taxes directly, but economic research shows that most of the property tax burden on rental housing is passed through to tenants in the form of higher rent.
This burden would fall disproportionately on younger Floridians. About 65 percent of households headed by someone under 35 are renters, not owners. A disproportionate share of lower-income households rent as well.
When taxes rise on rental property, building apartments becomes less profitable. Even when most of the burden is borne by renters, higher prices shift the demand curve, pushing people toward substitutes like sharing lodging with roommates longer. With affordable housing, where it may not be possible to shift much of the higher tax cost to tenants, supplying housing becomes less profitable, meaning that less of it will be built and existing units will be less well-maintained.
Even future homeowners lose out. Because of the existing Save Our Homes assessment limits, a longtime homeowner’s taxable value can be a fraction of the home’s market value. For many, exempting $250,000 of taxable value could take their home off non-school property rolls entirely. A house purchased in the mid-1990s with $250,000 in taxable value in 2028 could easily be worth more than $600,000 in market value, and none of it would be subject to city or county property tax.
But a young family buying their first home owes tax on current market value, at the higher rates that Amendment 3 could generate. They will also likely pay more for that house, because the lower expected future property tax burden drives up the home’s sales price. Amendment 3 creates a windfall for long-time incumbent homeowners, but it may come at their kids’ expense.
For many Floridians, who receive little or no tax relief from Amendment 3, the result would be a combination of higher taxes and fewer services. And even as local budgets decline, the cost of providing services will rise. Local governments borrow for major infrastructure projects.
Voter-approved bonds provide the capacity to impose the taxes necessary to pay the debt service, but much of Florida’s borrowing is paid out of the general fund budget, which shrinks under Amendment 3. The major ratings agencies have already issued warnings about the measure’s effect on local finances. Amendment 3 would make Florida localities less creditworthy, which increases borrowing costs.
Faced with new constraints that force immediate cuts or require significant tax rate increases just to keep revenues flat, cities and counties’ fiscal capacities will decline, and their borrowing costs will rise. Not only will revenues be lower, but they will have to spend more of that lower revenue on interest payments rather than on service delivery.
The cost of housing is a serious concern, and it can be tempting to do something—anything—to address it. But good intentions are not enough, and carving up the property tax base is likely to make the problem worse, not better.
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