Temple Terrace faces $4 million annual loss after tax break passes

Temple Terrace will lose roughly $4 million in property tax revenue every year once Florida’s new tax break takes full effect.

The state’s voters approved Amendment 3 on Nov. 3 with 62% of the vote. The measure raises the non-school homestead exemption from $50,000 to $150,000 in 2027, then to $250,000 in 2028. For many homeowners, this change could erase non-school property taxes entirely. For the city of Temple Terrace, the change creates a growing budget hole. The shortfall will start at $2.6 million in fiscal 2028 and grow to $4 million the following year. That amount represents about 20% of the city’s property tax revenue.

Mayor Andy Ross said the city has no cushion to absorb that loss. “We do not have 20% slack,” Ross said the day after the election. He expects the city to maintain essential services like water, garbage collection, police, and fire response. However, he is less certain about funding for cultural and community amenities. Ross said the city might have to lay off workers to balance the books. “I don’t know if we’ll be able to do it without laying people off,” he said.

Gov. Ron DeSantis, who promoted the amendment, rejected the idea that the tax break would just shift the burden to other revenue sources. “They said it would be a tax shift; it’s not going to be a tax shift, it’s going to be a reduction,” DeSantis said after the election. To protect that outcome, DeSantis has proposed a special legislative session before the end of the year. The goal is to pass a taxpayer’s bill of rights that would stop local governments from raising other taxes to make up for the lost revenue. Ross believes the math is harder than the governor suggests. He expects the city will need a mix of spending cuts and higher fees or taxes, though the governor’s proposal may limit how much the city can raise in new revenue.

The city’s 2027 budget is already set, so the financial impact will not hit until the following year. Ross expects the city council to begin difficult budget conversations in the spring. He noted that the city has already considered cutting library hours or charging more for recreation centers. “Those are the things you look at first,” he said. Ross admitted the city has inefficiencies but argued that defining waste is subjective. He cited the replacement of a four-year-old treadmill at a recreation center as an example. Some might see that expense as unnecessary, while regular users might view it as a reason to stay in the neighborhood.

Inflation is making the problem worse. Police vehicles that cost $40,000 now cost $60,000. Ambulances that cost under $300,000 now cost about $500,000, and fire trucks can cost $1 million. “Everything that you buy at home that’s gone up, it’s gone up for us too,” Ross said. The city is also preparing for a major capital project. In August, voters approved a $50 million bond to build a new police headquarters and a third fire station on Harney Road. Officials waited until after the November election to issue the bonds because they knew the amendment could change the financial picture. Ross said the legislation was poorly thought out and that he hoped it would fail to force a better fix. Instead, he fears the gap between costs and revenue will keep widening. “The divide just keeps getting wider and wider and wider every single year,” he said, “until at some point they’re either going to have to change it or cities are going to go bankrupt.”