Monroe County could face substantial budget reductions, estimated at $27.2 million by fiscal year 2028-29, if voters approve a statewide measure to cut property taxes on primary residences this November. The proposed measure, which has passed both the Florida House and Senate, aims to phase out and eventually eliminate property taxes for primary homeowners by significantly increasing the homestead exemption. If approved by 60% of voters statewide, the exemption would rise to $150,000 by 2027, $250,000 by 2028, and be adjusted for inflation thereafter. School districts are exempt from these changes, but counties, cities, and special districts are preparing for potential revenue shortfalls as early as the next budget cycle.

Potential Revenue Loss and Budgetary Impacts

“This is not going to be pretty. None of us are going to enjoy it,” said Commissioner David Rice. “I think the public will not like it any more than we do when they see how it will affect their lives. But we’re going to have to do it.”

Beyond the increased homestead exemption, the joint resolution also proposes capping annual assessment increases on nonhomesteaded properties, such as commercial buildings, second homes, and vacation rentals, from 10% to 5%. According to county finance director John Quinn, approximately two-thirds of the projected $27 million in lost revenue for the county by 2028 would stem from this cap on nonhomesteaded properties. In response to these potential financial challenges, Monroe County officials are revisiting cost-cutting measures. At a recent meeting in Key Largo, County Administrator Christine Hurley presented commissioners with various options for reducing the fiscal year 2028 budget for departments, constitutional offices, and services funded by property taxes. An analysis is planned to determine how much each agency or department would need to cut based on their reliance on ad valorem taxes. Constitutional offices, including the state attorney, public defender, tax collector, clerk of the court, property appraiser, and the judicial court system, account for over 90% of the county's property tax levy, with the remainder funding county operations.

Exploring Alternative Revenue and Cost-Saving Strategies

Commissioner Craig Cates emphasized the need for shared responsibility in addressing the potential revenue loss, stating, “You can’t expect to take all that money we’re going to lose from the county’s budget. It has to be distributed evenly. We all have to work together to address this.” Commissioners are considering adjustments to fee structures, such as implementing paid parking at public parks, to offset the potential decline in ad valorem revenue. Budget discussions for fiscal year 2027 are set to include deliberations on employee cost-of-living adjustments, with some commissioners favoring no raise or a modest adjustment of 2.7% given the uncertain financial outlook. Contractually obligated increases for fire rescue and sheriff's deputies are already in place. Other proposed cost-saving measures include consolidating offices to reduce utility expenses and eliminating non-essential internal and citizen committees. The possibility of increasing the sales tax by one cent, which would require voter approval, is also being explored as a means to fund fire protection and rescue services. Assistant County Administrator Tina Boan noted that emergency and fire rescue services are heavily dependent on property tax revenue, facing rising costs for personnel, equipment, and facilities, alongside increasing demand. A sales tax increase could diversify funding and capture revenue from tourists, as detailed in Keys Weekly.

Extreme Measures Considered

During the meeting, a proposal to shorten the work week to four days (32 hours) was also discussed. Hurley described this as an “extreme proposal” that would likely impact employee salaries. Commissioner Holly Raschein expressed reluctance, stating she would only consider such a measure in a dire situation, which she does not believe the county is currently facing. Commissioner David Rice concurred, hoping to keep this option as a remote possibility and not a direction to pursue unless absolutely necessary. The outcome of the November vote and subsequent legislative actions will determine the extent of these potential changes for Monroe County. For more information on the proposed property tax changes, voters can consult resources from Florida Realtors.