Monroe County officials say the potential financial impact of a proposed Florida constitutional amendment increasing the homestead exemption could be significantly less than initially projected.
Monroe County Administrator Christine Hurley joined Good Morning Keys on Keys Talk 96.9/102.5FM this morning to talk about what’s going on in the county.
County Property Appraiser Scott Russell and county budget staff spent about three weeks reviewing the potential effects of Amendment 3 and came up with a substantially different projection than the state agency’s initial estimates.
“We are one of two counties in Florida that will not lose revenue,” Hurley said.
Earlier projections had indicated Monroe County could lose about $9 million in fiscal year 2027 and an additional $7.5 million cumulatively in fiscal year 2028.
The analysis found that those projections were based on a loss of potential growth in assessed property values rather than an actual reduction in the county’s anticipated tax revenue.
Assessed values are used to calculate property taxes collected through the county’s millage rates.
Under the revised projections, Monroe County is now expecting an increase of approximately $287,000 in ad valorem revenue in fiscal year 2027 and about $1.5 million in fiscal year 2028 if the amendment passes.
Hurley said the revised figures provide some breathing room for the county, although officials remain cautious because the county’s expenses continue to rise.
Monroe County has historically benefited from strong property values and annual increases in assessed value, which have helped offset higher costs for goods, services, contracts and other government operations.
“It’s not at all as bad as what we thought,” Hurley said. “So we’re celebrating that, but we’re cautiously looking at next year’s budget because we know we will have increases in expenses and we’ve got to figure out how to cover that.”
Hurley said the county may have to consider additional budget reductions, shifting some services to fee-based revenues and identifying other potential sources of funding.
County officials also plan to conduct a detailed review of tourist development tax revenues to determine whether more expenses could legally be shifted to those funds.
The county has been working with new Tourist Development Council Director Kara Franker and already shifted some expenses during the current budget cycle.
Officials will explore whether additional changes could be made and whether a legislative change might be necessary.
Hurley said securing a change at the state level could be difficult because tourist development tax revenues are strongly protected by the tourism industry.
However, Monroe County’s designation as an area of critical state concern could potentially provide an opportunity for a carve-out, she said.
The county also faces another state-mandated budget challenge.
Hurley said legislation requires Monroe County to conduct a 10% budget reduction exercise as part of development of the fiscal year 2028 budget.
“This is a brand new thing we’ve never had to do before,” Hurley said.
County department directors have already begun preparing for the process.
One of the more difficult requirements, Hurley said, will be identifying expenses that are legally obligated or mandated by state and federal governments.
“There’s a lot of state and federal mandates that we have to provide,” she said. “We kind of know what they are, but we’ve never quantified them by dollar amount so specifically.”
Hurley expects that work to become more visible in late spring or early summer.
County officials are also watching what happens in the Florida Legislature because future lawmakers could make changes to the state’s tax and budget policies.
Hurley said Amendment 3 would be a constitutional amendment, making it more difficult for the Legislature to simply reverse its provisions. The amendment also includes a long-term goal of eliminating ad valorem taxation, although it does not establish a specific timetable for how such a change would occur.
Hurley said the potential elimination of ad valorem taxes would fundamentally change how local governments fund services.
“If we had complete elimination, that would completely change the way we fund things and our ability to provide a lot of our services,” she said.
The county is scheduled to hold a special meeting Oct. 20 to discuss Amendment 3 and its potential implications.
For now, Hurley said the county is taking the revised revenue projections as positive news while continuing to prepare for higher expenses and state-mandated budget reductions.
“I’m calling it breathing room,” Hurley said.
She encouraged residents to enjoy the Labor Day weekend safely and recognize the county employees and other workers who provide services throughout the community.
County offices and services will be closed Monday for Labor Day.