- March 4, 2026
Florida's property tax reform, if approved by voters, would cause the City of Ormond Beach to lose $11.2 million in revenue.
House Joint Resolution 203 proposes amending the state constitution to make homesteaded property exempt from all property taxes, with the exception of school taxes. It would eliminate 44% of the total property taxes currently collected by the city.
The potential impacts of property tax reform were discussed during a commission workshop on Tuesday, March 4, where the city's Finance Department outlined how Ormond Beach could slash future budgets. Any property tax reform passed is forecasted to impact budgets for the 2027-2028 fiscal year, giving local governments — who largely rely on property tax revenue for core operations — a year to prepare, as the Florida House recently passed an amendment to nix a phased approach.
"However, if we lose $11.2 million, we have to start thinking about that now because that's a lot to make up," Finance Director Kelly McGuire said.
Under its current millage rate, the city collects about $25 million in property taxes. Non-homesteaded and commercial property accounts for about $5.7 million and $4.7 million, respectively. Other taxable property brings in about $3.5 million.
Looking at hypotheticals, McGuire said some options to offset the loss of homesteaded property tax revenue include an increase in sales tax, which would have to be done at the state level. The city currently receives about $3 million in sales tax revenue a year.
Ormond Beach could also increase the tax rate for commercial and non-homesteaded property. The increase would likely need to be double the current tax rate for businesses.
"You'd be putting people out of business," Commissioner Travis Sargent said.
The city could look at implementing new fees or increasing existing ones. Options include:
The issue is, McGuire explained, that many of these are department-specific, meaning that dollars generated by a specific fee cannot be used for another purpose. Regarding parks and rec, current fees only cover 6% of the department's cost; 94% of parks and rec is funded through property tax dollars. Additionally, several core government departments do not provide services directly to citizens, making implementing a fee challenging.
"So we all can see, right, that this is just a moving-around game," McGuire said. "The state says 'We're going to cut your property taxes,' and then the city has to move those things around."
The other option on the table is to cut the budget by $11.2 million.
Options include:
"When you start to get into those conversations about reducing services, then you start to get into issues that have to do with collective bargaining," McGuire said. "So it's not a simple, 'City Commission says City Hall is only going to be open now Monday, Wednesday and Friday. It's a much more in-depth conversation."
The city has three scheduled budget discussions later this year. On May 19, the commission will discuss the Capital Improvement Program. On June 2, there will be a discussion on the preliminary tax rate and budget. Based on that meeting, staff will bring back a draft budget for the commission to review on July 21.
