Local officials prepare for impacts of Amendment 3
For those hoping Amendment 3 will reduce their tax burden, Tuesday’s vote was the easy part.
With 62% of voters in favor of the homestead exemption increase, property owners who live in their homes will now be exempt from paying local property taxes for up to $150,000 of their property’s value next year and up to $250,000 of their property’s taxable assessed value in 2028. The increased exemption will not apply school taxes.
Now, the hard part will begin.
At the state level, legislators will need to develop and implement a plan ahead of the Jan. 1 implementation date.
At the local level, governments will be forced to either slash costs — which some say means cutting services and personnel — or raise millage rates or impose new taxes, some of which could disproportionately fall on non-homestead property owners.
Lee County District 3 Commissioner David Mulicka, who is the incoming chair of the Lee County Board of County Commissioners, sees a lot of difficult choices ahead. Mulicka had expressed concern for the impact Amendment 3 could have on county services ahead of Tuesday’s vote.
“The voters have spoken and we will heed their call. That’s what they asked us to do and we are going to have to live on less money,” Mulicka said. “There are going to be some growing pains along the way to make some hard decisions and certain priorities will have to change.”
Mulicka said, “There are going to be some tough choices to make.”
His top concerns include impacts to parks, boat ramps, hurricane rebuilding projects and funding for the care of beaches that he said “benefit from investments the county makes.”
Mulicka is concerned that the county may have to make personnel cuts.
“I have really done all I can for people and families to keep their jobs,” he said.
Mulicka said the county may have to introduced new or increased fees.
The county commissioners and staff held a work session in September to go over potential revenue from increased fees, which would add potentially another $20 million in new revenue to make up for the lost tax dollars.
“Nothing is going to be for free,” Mulicka said. “I am a conservative businessperson and I take the facts as they come and I make informed decisions as we go to do the best we can.”
Mulicka, who owns HONC Destruction and HONC Recycling, compared the changes that will need to be made to how he would have to run his business with less revenue.
Mulicka said the county’s procurement services and subcontracting processes will need to change. He thinks the county will have to cut the amount of projects that are subcontracted out and do the work with staff.
“I, as a business owner, wouldn’t know how to give $10 worth of service for $6 two years from now,” Mulicka said. “There are going to have to be some give and take on what the priorities for services are.”
Mulicka said he is looking to see what happens at a special session of the state legislature, which was recently announced, to see what potential impacts there could be on the county as related to the new exemption.
Mulicka said that county roads, although largely funded by gas tax revenue, tolls and other sources, could be impacted though “not as drastically” as other departments.
“There is somewhere around $30-40 million a year from the general fund we used to enhance the Department of Transportation’s budget to accelerate projects. That sort of latitude is probably going to be constrained as part of this overall discussion,” Mulicka said.
Mulicka compared the current situation to making sacrifices during the Great Recession. “You eat peanut butter and jelly instead of steak,” Mulicka said. “That’s what you do for your family.”
Mulicka said he didn’t want to “overspeculate” on what kind of cuts may be needed to make up for the large revenue shortfall the county will be experiencing in order not to create a false sense of crisis but said “we will serve the will of the people the way we have been instructed.”
Lee County District 2 Commissioner Cecil Pendergrass, who opposed Amendment 3, said he thinks voters were misled by the campaign in support of Amendment 3.
“I think people were misled into thinking they won’t get a tax bill next year,” Pendergrass said. “Their tax bill won’t really go down that much.”
Pendergrass said the impacts will be deep on local programs. He expects the county’s Conservation 20/20 program, which directs county funds to protecting ecologically sensitive lands, could be depleted.
“There will be big changes to how we do our budget,” Pendergrass said.
He said funding for parks and recreation and human services will be “drastically cut.” He thinks there could even be new tax increases either at the local or state level.
Cape Coral
In the city of Cape Coral, incoming council members are preparing to address the impact.
“According to Florida Sen. Jonathan Martin, Cape Coral could be one of the hardest-hit cities in the state under Amendment 3, potentially the hardest or second hardest,” said David Newton, newly elected to District 1. “We are facing some very challenging times ahead, and there will undoubtedly be some difficult decisions to make. We are going to have to tighten our belts and take a hard look at how we spend taxpayer money. We need to prioritize needs over wants and make sure every dollar is being spent responsibly.”
Levels of service are among the issues.
“Our residents depend on a certain level of services from their city government, and we need to do everything possible to maintain those essential services. This is going to require every department working together, reviewing operations, identifying inefficiencies and finding savings wherever possible, no matter how small,” he said.
“I believe we need to be creative, transparent and disciplined with our spending. Our responsibility is to protect our residents, maintain essential services, and make sure Cape Coral remains financially responsible for both today’s residents and future generations
Annette Warren, newly elected to the District 6 seat, is optimistic about the impacts.
“I believe Cape Coral will be OK,” Warren said. “We have been conservative with our budget and that will help us moving forward. It won’t be easy, and we will have to make cuts. Until we know the full impact, I can’t say exactly what those cuts will look like.”
“We will work together as a council, with staff and our residents, to figure it out,” she said. “There will be tough decisions, but my goal is to make this as painless as possible while protecting the services our residents depend on.”
Fort Myers Beach
The town of Fort Myers Beach at the moment is one of the luckier municipalities, relatively speaking, as the large majority of properties are not homesteaded. Still, the town is forecasting approximately $294,000 in lost property tax revenue in the second year of the homestead property exemption increase. That was enough of an amount of missing tax revenue the town needed that caused the town council to raise its parking meter rates from $6 an hour to $7 an hour.
For the Fort Myers Beach Fire Control District, the revenue loss would cause a millage rate increase for the department to continue its current level of services, Chief Scott Wirth said. Approximately 18% of the district’s revenue is from homestead property. The district currently has a millage rate of 2.65 mills per thousand dollars of property value. In the first year of the exemption increase in 2027, Wirth said the millage rate would need to go up to 2.85 mills per thousand dollars of property value to maintain the same level of services based on current property values. The rate would go up to 2.95 mills per thousand dollars of property value in 2028 based on the current level of property values to maintain the same level of services.
Town of Fort Myers Beach Councilmember Rebecca Link said she will be requesting confirmation from town staff of the projected revenue losses
“The voters have spoken, and their voices have been heard. Our responsibility now is to understand the financial implications and plan accordingly,” Link said.
To reach NATHAN MAYBERG, please email nmayberg@breezenewspapers.com