State Senator Nick DiCeglie recently delivered unsettling news to St. Petersburg city council members: Governor Ron DeSantis remains determined to eliminate—or at least significantly reduce—property taxes in Florida.

For St. Petersburg, that could be catastrophic. Property taxes make up 73% of the city’s general fund, and nearly all of that money goes toward public safety. Assistant City Administrator Tom Greene noted that 95.6% of the city’s $228.9 million in ad valorem revenue for fiscal year 2026 is budgeted for police and fire services.

The issue came up during a July 27 legislative committee meeting and a budget presentation later that day, where DiCeglie acknowledged both the governor’s commitment and local concerns. “It’s clear to me, and should be clear to all of you here, that the governor is pretty focused on having a (property tax) question on the ballot,” he said. “But I share the same concerns.”

Governor DeSantis floated a proposal to provide $1,000 rebates for each homesteaded property, which could pass this year. However, a complete repeal of property taxes would require a statewide referendum in November 2026.

The Florida Policy Institute estimates that property taxes generate $55 billion annually. Replacing that revenue could require doubling the state sales tax from 6% to 12%.

City Councilmember Lisset Hanewicz warned that such a shift would severely undermine core services. “The money is going to things that we really need,” she said. “Residents expect a certain level of service from their government.”

Florida would be the first state without both income and property taxes if the proposal succeeds. Other ideas under consideration include a $500,000 homestead exemption—with a $1 million cap for seniors—and a 15% limit on annual assessment increases.

“Property taxes effectively require homeowners to pay rent to the government,” DeSantis said earlier this year, after unveiling the exemption plan and vetoing a study that would have examined the financial impact on local governments.

But critics warn the state isn’t prepared to fill the gap. “There’s no way the state is going to be giving tens or hundreds of millions of dollars directly to cities and counties to make up that difference,” said Rep. Lindsay Cross.

DiCeglie added that rural areas could face a $300 million shortfall and emphasized that large cities like St. Petersburg would be even more severely affected. “Each city losing hundreds of millions of dollars should put a lot of our colleagues at the end of their seats,” he said. “I don’t support a complete elimination of property tax. I’m not interested in handicapping local governments and their ability to provide services that we all expect.”

Rep. Michelle Rayner is one of 37 lawmakers on a House Select Committee created to study property tax reform. DeSantis criticized the bipartisan group in May, saying, “You convene a 37-person committee if you’re trying to smother it in the crib.”

Cross said the committee will meet throughout the summer, but doesn’t expect much attention to be given to how cities like St. Petersburg would be impacted.

Councilmember Deborah Figgs-Sanders reminded attendees that 33% of Pinellas County’s property tax revenue goes to schools. The district is already scrambling to replace $10.7 million in lost federal and state funds.

Critics also argue that the elimination of property taxes would favor the wealthy and hurt average residents. Raymond James Financial was the city’s top taxpayer in 2024, contributing $130.37 million, followed by a series of downtown high-rises. Ascent condominiums, for example, generated $100.4 million per acre—vastly more than Raymond James’ $4.6 million per acre footprint.

David Thompson, St. Petersburg’s director of government affairs, reaffirmed Thursday that the governor remains “very keen” on eliminating property taxes—at least for homesteaded properties. DiCeglie called it a “huge topic of conversation,” but acknowledged, “the devil is in the details.”

“As we get to committee weeks,” he added, “maybe we’ll have a better idea. But we’ll see how it all plays out.”

Follow the St. Pete-Clearwater Sun on Facebook, Instagram, Threads, Google, & X

(Image credit: Mark Parker/St. Pete Catalyst)

PIE-Sun.com: local St. Pete-Clearwater news