Could Florida Governor Ron DeSantis Eliminate Estate Taxes in the Sunshine State?

US: Although it would likely be difficult, Florida Governor Ron DeSantis has indicated that he is in favor of doing away with or significantly reducing property taxes in the Sunshine State.’

Last Monday, the Republican governor agreed with a post on X, previously Twitter, that said property taxes for newly constructed properties shouldn’t be determined by their supposed worth. “I agree,” wrote DeSantis. The governor responded to another post stating that property taxes should be abolished in the state, stating that he would back the proposal and agreed that “taxing land/property is the more oppressive and ineffective form of taxation.”

The Florida Constitution would need to be amended in order to abolish property taxes as they are collected locally rather than at the state level. In order to do this, a joint resolution would have to be approved by 60 percent of voters in a general election after receiving a three-fifths majority in both legislative houses.

DeSantis wrote, “We should put the boldest amendment on the ballot that has a chance of getting that 60 percent,” in a post on X. Eric, the son of President Donald Trump, commented on the post on X, saying: “Florida is setting the standard! “This is incredible!”

Assaf Harpaz, an associate professor of law at the University of Georgia, told Newsweek that while homeowners and those thinking about relocating to the state to buy a property could find such a program appealing, Florida is already a tax-friendly state.

“It is one of the few states that does not impose an income tax or a tax on Social Security benefits,” he said. “The proposal—if implemented—may significantly reduce funding for government services and those who rely on them.”

In Florida, the proposal to do away with property taxes may soon get more than a passing mention. State Senator Jonathan Martin, a Republican from Fort Myers, submitted SB 852, a measure that might lead to a study of the prospect of doing away with property taxes, on Tuesday for consideration during the legislative session that begins on March 4.

Among other things, the review would look at how “public services, including education, infrastructure, and emergency services” would be affected by the removal of property taxes and if “consumption-based taxes would make Florida more attractive to businesses compared to other states.”

According to Harpaz, removing property taxes would make Florida unique among states, as it would be the only one to collect neither income nor property taxes. “In fact, it would be the only state where property taxes are not collected,” he said.

However, there would probably be a lot of resistance to such a plan. Harpaz said that “spending would have to be significantly reduced, and likely a combination of both.” This would require replacing the revenue formerly collected via property taxes.

Florida now “supplements the absence of a state income tax with other sources of revenue, such as sales taxes,” according to Harpaz. “It is aided by a booming economy, ample tourism and positive net migration.” However, even the state’s booming economy would not be enough to offset the revenue losses brought on by the removal of property taxes.

“Property taxes help fund essential services such as schools, police and fire departments, so the foregone revenue would have to be made up somehow,” Harpaz said. “Florida’s economy is strong, yet billions in foregone revenue would need to be replaced to support the essential services typically funded by property taxes.”

The Florida Policy Institute’s Esteban Leonardo Santis, Ph.D., policy analyst, told Newsweek that the state’s removal of property taxes “would likely result in either higher sales taxes or severe cuts to essential public services, including education, public safety, infrastructure, and community programs.”

Renters and other low- to moderate-income families “would bear a disproportionate burden if sales taxes were increased to offset lost revenue,” according to research that the Florida Policy Institute will shortly issue, according to Santis.

“Additionally, local governments would lose fiscal autonomy, becoming reliant on state funding, which could lead to underfunding and competition for resources,” he said.

While circuit-breaker programs and high-value real estate taxes are examples of property tax measures that might alleviate tax system injustices, their complete repeal runs the danger of upsetting municipal finances and jeopardizing community investments. The plan emphasizes how crucial it is to carefully weigh fairness and budgetary sustainability while tackling Florida’s affordability issues.

According to Harpaz, the movement to lower or abolish property taxes seems to be spreading across the United States. In recent years, a number of property tax reform bills have been introduced in North Dakota, Illinois, Texas, and other states, indicating a desire to curtail or do away with them entirely.

“Naturally, individuals and businesses prefer paying lower taxes or not at all,” Harpaz said. Since property taxes are often dependent on the assessed value of the property, the reduction or removal of property taxes is becoming more and more popular, partly as a result of growing housing expenses.

“State-to-state tax rivalry may also result in lower property taxes, which would draw in new residents and potential purchasers. There has been a recent surge in migration from other states to places like Florida that provide very competitive taxes.

However, most experts believe the proposal is unrealistic for municipal governments, even if it sometimes reappears in the public conversation in places that are amenable to it, such as Florida, where it was previously considered between 2006 and 2008.

Ronald C. Fisher, an economics professor at Michigan State University, characterized the proposal as “just counterproductive policy thinking” in an analysis of the potential for property tax elimination. For municipal governments to remain viable, property taxes are essential, “making the idea infeasible,” according to Fisher.

The economist advised state governments to concentrate on establishing accurate property assessments that would thereafter reflect the right tax levels rather than attempting to do away with or dramatically cut property taxes.

“Focusing on improving property assessment would strengthen the property tax without having to find a replacement,” Fisher said.

According to recent research by the Tax Foundation, “despite its unpopularity, the property tax is relatively economically efficient, and shifting to any alternative tax would harm economic growth.”

“The property tax is a tax worth saving—and therefore worth reforming,” analysts at the Washington-based think tank said. Though they shouldn’t overcompensate by abolishing or drastically reducing an economically effective tax, policymakers should endeavor to limit the unchecked increase in property tax burden that has been seen in certain regions of the nation.