County projects major revenue shortfalls if Florida homestead amendment passes, staff says

Martin County Office of Management & Budget Director Stephanie Merley briefed commissioners on June 9 about the possible county fiscal impacts if a proposed constitutional amendment on homestead exemptions passes the November 2026 ballot. Using current taxable values, staff estimated a first-year revenue reduction of about $42.5 million under a $150,000 homestead-exemption scenario; a larger phase-in or fuller exemption could reduce revenues by more than $170 million annually, Merley said.

Merley told the board that the estimates shown were the direct loss of ad valorem revenue and did not include secondary effects such as lowering the non-homestead assessment cap from 10% to 5%, which Florida Association of Counties preliminary analysis suggests could add approximately $14 million in year‑one impact for Martin County. She stressed several elements of uncertainty in the legislation and implementing statutes, including how the state may define eligible categories of spending (public safety, judicial services, corrections, infrastructure, public health, human services and general government), allowable millage adjustments, and the legislature’s authority to phase out taxation over an unspecified timeline.

“Based on current taxable values, the county could see revenue reductions ranging from approximately $42.5 million under the $150,000 exemption to more than $170 million under full homestead property tax elimination,” Merley said in the presentation. Staff recommended preparing two public-facing scenarios for county residents: one that shows the fiscal impact without any shift in millage (i.e., revenue loss only) and a second that models plausible tax-shift options and fee-for-service alternatives the county may consider if revenues fall short.

Commissioners pressed for clarity on timing: Merley said the November 2026 ballot would have an effective date of January 1, 2027, if approved with the required 60% voter threshold, meaning changes would factor into the county’s FY 2028 budget process. The board also discussed the prospect of phasing in reductions and the consequences for capital maintenance, grants requiring local matches, and public-safety services — which currently receive about 65% of county property-tax dollars under the county’s budget structure.

County Administrator Don Donaldson and commissioners urged that the county prepare clear, neutral educational materials so voters understand the trade-offs. Commissioners said they plan to review staff’s two-scenario analyses and consider public outreach explaining what services and programs could be affected at different revenue loss levels.

What’s next: Staff will develop a “hot topics” page and scenario analyses for the board and public; commissioners said materials should be factual, balanced and avoid alarmist language while showing concrete consequences (service reductions, fee options or tax shifts) for the range of outcomes.