Senate Finance committee hears new county-level ad valorem forecasting approach; office warns major homestead changes could worsen fiscal outlook

Amy Baker, the offices lead presenter, told the Senate Finance and Tax Committee on the committees briefing day that the states revenue-estimating and impact-conference process is defined in law and requires consensus among four principals before a forecast is adopted. "All forecasts adopted by estimating conference have to be by consensus. That means it's unanimous," Baker said, explaining the legal and procedural basis for the numbers the Legislature uses.

Baker described methodological changes adopted this year that move forecasting to a bottom-up, county-level approach and incorporate confidential parcels for the first time. "Each county stands alone. It gets its own unique forecast, and then we sum across all those counties to get to the statewide numbers," she said. The new process also models counties and school roles separately to improve precision.

Using figures adopted in the summer 2025 forecast, Baker said the states just (market) value is roughly $5.1 trillion, and statewide taxable value is about $3.3 trillion. She told senators the difference is driven by differentials and exemptions: "about 50% is being taken out between those differentials and exemptions to get to taxable value." Baker said roughly $900 billion of homestead value is removed through homestead differentials (about 37.6% of homestead just value) and that exemptions account for roughly $300 billion (about 12.7% of homestead just value).

Baker emphasized wide county variation. Southern coastal counties such as Palm Beach, Broward, Miami-Dade and Monroe show the largest dollar benefits from differentials, she said, while some northern counties have higher percentage use of exemptions. She noted the parcel distribution is skewed: many homesteads contribute little remaining taxable value while a small number of parcels represent substantial taxable value. "You have a large number of parcels that have very little that they're contributing the taxable value," she said. "At the other edge... you have fewer parcels, but those fewer parcels represent a lot of taxable value."

On the mechanics of impact conferences, Baker explained analysts first isolate which part of the adopted baseline forecast is affected, estimate county-by-county taxable-value impacts, and then convert those taxable-value changes into ad valorem tax losses by applying county millage rates. For the analyses presented to the committee, the office used 2024 millage rates for conversion because many 2025 millage rates were not yet available; those conversions will be updated after counties report 2025 rates.

Baker described how impact documents present both cash and recurring effects and typically extend the recurring calculation over six years. She also explained timing for ballot measures: constitutional amendments that do not specify an effective date generally would take effect January 1, 2027, producing recurring impacts even where the first-year cash impact is zero. She distinguished "self-executing" amendments that implement immediately from amendments that require implementing legislation and therefore show different impact pathways.

Importantly for lawmakers, Baker said impact conferences estimate tax-loss magnitudes but do not attempt to model local budgetary responses: "impact analyses address the tax loss, but they do not address any budgetary impacts," she told the committee. When senators asked who provides analysis of budgetary responses at the local level, Baker said the conference process does not provide that; county annual financial reports can be used for general context but do not trace a specific property-tax dollar to a particular service.

Committee members asked about pending proposals. Baker said the office has reviewed seven constitutional-amendment proposals related to ad valorem property tax that have been filed in the House and adopted impacts for each as stand-alone analyses. She cited a range of proposals—from one that would remove all remaining homestead taxable value to others that would expand portability for non-school property-tax benefits—and noted the office posted its adopted impact reports online. On specific scale, Baker said one proposal that would remove all remaining homestead taxable value corresponds to roughly $1.2 trillion in homestead taxable value and, when converted to tax dollars under the offices modeling for the first year shown, about $13 billion in tax dollars (with an effective date typically shown as 01/01/2027 in the scenario presented).

During questioning, senators pressed on broader fiscal consequences. Baker cautioned that the effect of any property-tax reduction on economic activity depends on the proposal and location and can take years to materialize: analyses of economic stimulus effects typically require multi-year modeling and county-level detail. She also said the proposals reviewed to date were non-school in scope (no effect on required local effort in those models), and that proposals affecting school taxable value or proposing state-funded replacements could change the state's three-year fiscal outlook.

The committee directed staff to compile and distribute the available impact analyses for members to review. After concluding the question-and-answer period, Senator Bernard moved to adjourn; with no objection, the chair declared the motion adopted and the committee adjourned.

Next steps: the office will adopt a final forecast on December 29 and will revise adopted impacts to align with that final forecast, and senators will receive the offices detailed impact documents online and from committee staff.