Dear Colleagues and Friends,

As previously reported, state lawmakers recently concluded two separate special sessions - one to finalize the State’s taxing and spending plan for the 2026-2027 Fiscal Year and another proposing major changes to the collection and use of property taxes by local governments.

AD VALOREM PROPERTY TAXES

On May 27 the Governor announced his property tax proposal and issued a proclamation calling for a special session to be held June 1-3. Over the course of two days, the House and Senate considered and ultimately passed two pieces of legislation similar, but not identical, to what was proposed by the Governor.

House Joint Resolution 1F proposes to amend the Florida Constitution as follows:

• Increase the homestead exemption for non-school taxes to $150,000 in 2027, and $250,000 thereafter
• Require property owners who were not permanent residents of Florida as of December 31, 2026, to establish Florida residency for five years before receiving the full $250,000 homestead exemption
• Set a 5% cap (currently 10%) on the maximum annual increase to non-school assessments for non-homestead property
• Place new limitations for how counties and municipalities may spend the ad valorem revenues they collect
• Require the Legislature, by general law, to prescribe a uniform procedure for counties, municipalities, and school districts to increase the amount of assessed value exempt from taxes
• Allow special districts to increase the amount of assessed value exempt from taxes, by referendum

No official fiscal impact statement has been published to date, but Legislative committee staff have estimated that, if passed, it could reduce statewide local government revenues by $4.6 billion in 2027-2028 and $8.4 billion in 2028-2029.

The Joint Resolution must be approved by at least 60 percent of the voters during the general election held on November 3, 2026. If passed, it will take effect on January 1, 2027.

Senate Bill 4-F revises the methodology used by local governments to determine maximum millage rates and allows for a longer ballot summary to describe HJR 1F than what is normally allowed under law.

For a more in-depth analysis of this issue, click here to read the alert prepared by the Ad Valorem Disputes & Exemption practice group at Stearns Weaver Miller.

BUDGET SPECIAL SESSION

The Legislature recently concluded a three-week special session, held between May 12 and May 29, where they considered and passed a budget for the 2027-2028 Fiscal Year, along with associated implementing and conforming legislation. These bills have not been sent to the Governor, where he will have an opportunity to exercise his veto authority. Highlights of the budget as passed by the Legislature include:

• A total budget of $114.5 billion, a $675 million reduction compared to the previous year
• Over $14 billion in total reserves
• Pay increases for Assistant State Attorneys and Public Defenders
• Florida Housing Finance Corporation - Housing Programs
• SAIL - $70.77 million
• SHIP - $165.7 million
• Cultural Grants Programs - $20 million
• Farmers Feeding Florida - $38 million
• Rural and Family Lands Protection Easements - $425 million
• Everglades Restoration - $638.6 million
• Local Water Projects - $379.9 million
• Resilient Florida Planning Grants and Projects - $170 million
• $50 million in funding for Hillsborough College for campus improvements, linked to the proposal to build a new stadium for the Tampa Bay Rays at the Dale Mabry campus
• Florida Education Finance Program (FEFP)
• A 1.64% increase to the Total Funds per Student served by a school district (from $9,187.36 to $9,337.67)
• A total of $1.56 billion of the base funds is set aside for teacher salary increases, including $200 million for teachers with at least 10 years of teaching experience in a Florida public school.

Additionally, a Higher Education budget conforming bill (HB 5601E) provides for the transfer of the University of South Florida Sarasota-Manatee Campus to New College.

Highlights of the annual tax package include changes to Florida law that would:

• Revise the dates of the permanent Back-to-School Sales Tax Holiday so that it would run from July 20 through August 20 each year
• Allow purchasers of home hardening products, including impact-resistant doors, garage doors, and windows, to seek a refund for purchases between July 1, 2026 and June 30, 2029
• Adjust notification timing for tax exemption denials to improve protest options for property owners
• Limit the annual assessment increase for certain mobile home parks
• Expand the portability window for the Save Our Homes benefit to include any homestead abandoned in the prior three years
• Require online property listing platforms to include the estimated property taxes for any residential property visible on their platforms
• Require certain fruit and vegetable packinghouses to be considered a part of the average yield per acre and not to be separately assessed
• Increase the vote threshold required to approve new tax levies by certain special local taxing authorities
• Extend the Child Care Tax Credit Program for one year

Stearns Weaver Miller will continue to monitor the actions of the Florida Legislature and Governor as they relate to budget and tax legislation, and provide updates.