House Finance reviews bill to raise local revenue growth cap, expand levy authority and change special‑education funding rules

House Finance took testimony on HB 2049 (presented in committee on April 3), a package of changes that would give local governments and school districts more room to raise property tax revenue over time and adjust several K–12 funding formulas.

Nonpartisan fiscal staff briefed committee members on the bill’s main elements: it would change the existing 1% annual revenue growth limit for regular state and local property taxes to a formula that incorporates population growth plus inflation, capped at 3% in a given year; raise the per‑pupil cap for enrichment levies (the voter‑approved levies that districts may use for programs beyond basic education) beginning in 2026 and phased to a higher cap in later years; increase the local effort assistance (LEA) threshold so more low‑property‑wealth districts qualify; and remove the statutory 16% cap on students that generate special‑education funding while standardizing the portion of a special‑education student’s general‑education allocation that is redirected to special education to 30% statewide.

Fiscal staff and the committee’s briefers gave revenue estimates included in the bill package: an increase in the state portion of property tax revenue estimated at about $200 million in the first biennium and $618 million in the second (a four‑year total of about $818 million), and increased local (non‑school) jurisdiction revenues estimated at $236 million in the first biennium and $741 million in the second (four‑year total about $977 million). On the school side, the per‑pupil levy cap increases and LEA enhancements were estimated to add roughly $130–$150 million to local levy collections in the 2025–27 biennium and more in subsequent years; the proposal to remove the 16% special‑education enrollment cap was estimated in the house‑passed operating budget context at about $82.3 million beginning in FY 2029.

Proponents — including mayors, county executives, city and county associations and many school districts — said the 1% limit is outdated and has produced a persistent structural revenue gap that forces local jurisdictions into service cuts or more regressive revenue solutions such as higher utility taxes. "This is a more realistic approach to allow revenue to keep up with increasing costs," the mayor of Duval told the committee. Several municipal and county witnesses emphasized that the bill would be an optional tool, not a mandate; local elected officials would still decide whether to use the increased authority.

Opponents — including taxpayers’ groups, business organizations and some homeowner advocates — said the change would effectively raise property taxes over time and argued the right approach is greater state budget transparency, spending restraint or asking voters directly. Multiple witnesses cited recent public opposition petitions and urged the legislature to respect the voter‑approved 1% cap (Initiative 747, 2001) or to send any major change to the ballot.

School finance advocates and some districts supported aspects of the bill that target inequities, such as raising LEA and removing the special education enrollment cap, but several K–12 finance officials cautioned against an accounting shift that moves funds between general apportionment and special education without additional state base funding. School district officers and education associations asked the committee to pair local options with stronger direct state investments in basic education and special education to avoid widening inequities between districts.

The committee heard many municipal, county and school district speakers, as well as testimony from the Building Industry Association, developers and housing advocates who warned that higher property taxes could increase housing costs or slow development. The hearing concluded with no committee vote; the record includes extensive written testimony and fiscal detail from staff.