Property Tax Amendment Raises Questions for Businesses

Voters will have a lot of decisions to make when marking their ballots in November and one that has drawn a lot of attention is Amendment 3. If approved by 60% of voters, the measure would increase the homestead exemption for all non-school taxes to $150,000 in 2027 and $250,000 in 2028 and adjust for inflation thereafter. While the issue has raised concerns from local governments about budget shortfalls, it could also have an impact on business and economic development efforts.

Several local governments and organizations have held or are planning town hall meetings to provide information on the amendment as the election approaches, including the Daytona Regional Chamber of Commerce, St. Johns County government and the Flagler Tiger Bay Club.

“We want voters to better understand how Amendment 3 could affect property taxes, local government revenue, public services and the broader community,” said Flagler Tiger Bay Club President Jay Scherr. “The potential implications for businesses and economic development are part of that conversation.”

Scherr said the group’s event, scheduled for 6 p.m. Sept.30 at the Palm Coast Community Center, is designed to help residents be better informed about the amendment and its implications.

“Our role is not to tell people what those implications should mean for their vote,” he said. “It’s to provide information, explore the potential benefits and consequences, and give voters an opportunity to ask questions.”

Scherr said the club has received a lot of questions and concerns about the amendment and the town hall itself and that has reinforced the group of the importance of providing an opportunity for people to learn more about the issue.

“Voters are being asked to make a decision that could affect residents, businesses, local government and public services,” he said. “They deserve an opportunity to understand what they’re voting on, ask questions, and hear factual information about the potential benefits and consequences. That’s why Flagler Tiger Bay Club is hosting this event. Our purpose is to educate, encourage civil discourse and help voters make their own informed decisions.”

The Flagler Tiger Bay Club forum will feature the county’s five constitutional officers who will provide information, answer questions and explain potential impacts to their respective offices. The event is free and no registration is required.

St. Johns County will hold its town hall on Amendment 3 at 6:30 p.m. Sept. 29 in the County Auditorium in St. Augustine. In addition, the county has released a detailed accounting of the steps officials have taken to protect essential services, evaluate capital projects and strengthen county reserves.

Scott Maynard, Senior Vice President of Economic Development & Public Policy at the St. Johns County Chamber of Commerce, said the measure could have an impact on business in the region and across the state.

“The proposal, if it passes, would reduce the county budget by $68,277,000 in 2027 and $136,100,403 in 2028 and beyond,” he said.  “This will require the county to either cut expenses or increase fees to make up the difference. Those fee increases, in many cases, will directly affect business owners.  The county’s Economic Development Department, and many others, are funded by ad valorem property tax revenue.”

Maynard said while the measure would present challenges, businesses would benefit from the lowering of the annual assessment-growth cap for non-homesteaded properties – which includes business and commercial properties – from 10% to 5% and would be a plus for businesses.

Maynard said if passed the amendment could also have a ripple effect on the broader local and regional economies.

“It will certainly have a short-term effect as the municipalities react and adjust their sources of revenue,” he said.

The Florida Economic Development Council, a statewide non-profit organization dedicated to advancing economic prosperity, professional development and advocacy for economic, workforce and community development professionals, issued a statement opposing the ballot measure.

“Amendment 3 would erode the revenue structure supporting Florida counties and municipalities resulting in uncertainty and disrupting the balance of the private-public model that prioritizes investments in transportation infrastructure, place-making and good jobs with sustainable wages for Florida families,” said the Council’s Executive Director, Beth Cicchetti, in the statement. “The Florida Economic Development Council supports thoughtful property tax reform that provides meaningful relief to Florida homeowners while preserving the ability to attract capital and talent and sustain vibrant local economies. Amendment 3, as currently structured, does not strike that balance.”

Then Daytona Regional Chamber of Commerce held a forum earlier this month with around 70 people in attendance according to Kristin Weiss, Chamber president and CEO.

“The forum was an important tool to provide education for our members on Amendment 3,” she said.” It was important for us to understand the amendment language, the implementation process if passed, and the potential effects on local government budgets and services, as well as potential alternative paths to property tax reform if Amendment 3 fails to meet the 60% threshold for passage.”

Weiss said it is unclear what the exact implications the amendment presents for business and economic development.

“Amendment 3 has no implementing language attached to it, so it is difficult to know what safeguards may be in place until we have that implementing language.” She said. “ There may be more incentive for municipalities to attract new businesses to their cities to diversify the tax base, but there also may be an incentive to raise business or commercial taxes, which would deter new business in many cases. There is not a good way to know what the impact will actually be at this moment in time, nor a good way to determine if the impact will be net positive or negative.”

Weiss said the Chamber is closely monitoring the amendment and forecasts of its potential impacts.

“Should we find that there will be an impact, the Chamber and local business community will work with local government officials to prepare for the impact, positive or negative, and to respond to it accordingly,” she said.