Boca Raton staff warn state property-tax reforms could cut $16.7 million from city budget; council schedules budget workshop

City budget staff presented a detailed analysis Tuesday of proposed state property-tax changes (House Joint Resolution 1F and implementing Senate Bill 4F) and told the Boca Raton City Council the city could face about $16.73 million in lost property-tax revenue when the measures take full effect.

The staff presentation described two-step changes to the homestead exemption that would raise the exemption to $150,000 on Jan. 1, 2027 and to $250,000 the following year, introduce a five-year waiting period for newly arrived residents, and reduce the cap on non-homestead assessed-value growth from 10% to 5%. Staff also outlined an administrative change in maximum millage-rate calculations included in SB 4F.

Why it matters: property taxes make up about 52.8% of the city's general-fund resources, and staff told the council that the combined effect of the proposals would remove roughly 11.6% of the city's taxable base. Staff's preliminary projection: a $8.14 million revenue loss in the first step and about $16.73 million when both steps are in place. That shortfall equals roughly 6.1% of the city's general-fund expenditures, staff said.

City staff presented concrete examples to show who would benefit and who would not. Using sample houses in a single neighborhood, staff showed an older homesteaded homeowner could see a property-tax bill drop from about $5,000 to $2,914 (a $2,137 or 42% reduction), while a more recently homesteaded home would see a smaller percentage reduction (about 16%). Non-homesteaded properties, such as seasonal rental units or second homes, would bear a larger share of the remaining tax burden, staff said.

Options and trade-offs: staff emphasized there is time to plan because the effective dates do not hit until the 2027 fiscal year. The presentation listed options the council can consider: increase the millage rate (staff estimated a roughly 12% increase in millage would replace the $16 million loss), raise or add non-ad valorem assessments and fees, reprioritize services through targeted budget cuts, use reserves, or pursue revenue strategies such as redirecting CRA increment, outsourcing, or public-private partnerships. Staff cautioned that across-the-board cuts of the magnitude needed would be steep: a uniform 6.5% cut across departments would meaningfully reduce service levels, and cuts above 5% risked affecting workforce capacity.

Public reaction: during the public-comment period, speakers were sharply divided. Supporters called the changes a necessary affordability measure: "Reducing property taxes is the biggest lever the city has to improve affordability and help our young families get into homes," said Mike Liebelson, a resident. Critics warned the proposals would shift costs onto renters, small businesses and less-wealthy cities statewide. "This is going to annihilate" smaller, lower-revenue communities, Pam Paschke said, urging protection of home rule and local services.

Council response and next steps: councilmembers stressed protecting core services, especially public safety, and asked staff for follow-up analyses. Councilmember Drucker said the city has been preparing, noting prior vacancy-management and cuts last year; other members urged careful prioritization and use of reserves where appropriate. The council set a budget workshop for June 18 to begin identifying specific policy directions and potential revenue or cut options.

What was not decided: the workshop did not include any formal votes or final policy directives. Councilmembers and staff described the staff estimates as preliminary and said further refinement would follow in the June 18 workshop and subsequent budget work sessions.

Context and legal notes: HJR 1F must be approved by 60% of statewide voters on the November ballot to take effect; staff also noted a pending legal challenge to the ballot language from a political action committee, Save Our Voters from Misleading Ballot Language, Inc. Staff said SB 4F contains implementing language on how local governments would administer the changes and modifies millage-rate calculations.

The council adjourned the workshop and said it would reconvene for the regular meeting at 12:45 p.m.; the budget workshop is scheduled for June 18 to begin more detailed policy planning and public engagement.