Miami Mayor Prepping 25% Budget Cut If State Follows Through On Eliminating Property Taxes

If Florida voters approve eliminating local homestead taxes in November, Miami is preparing funding cuts to local hospitals, police, fire, parks, public schools and water management, Mayor Eileen Higgins said Tuesday at a Bisnow event.

Higgins, who was sworn in as mayor in December, said the city is preparing multiple budgets with contingencies — including cuts of 10% and 25% if it loses the ability to collect property taxes from homeowners.

“If the voters vote for this in November, we’ve got to be ready to go,” Higgins said at Bisnow's Condoverse conference at the Miami Airport Convention Center. “It's not going to be a joke, and I'm not going to start planning on Nov. 10. I want to plan now so that we know what we're doing and we're able to comply with the law.”

The budget cuts could leave the city vulnerable to losing its parks, after-school activities and camp programs for kids, Higgins said. Projects to approve street drainage — critical amid increasing flooding, even on sunny days — would be canceled, and police and fire services would be cut back, the mayor warned.

For developers like billionaire Jorge Pérez, known as the “Condo King of Miami,” who are trying to retain and attract city residents, the threat of losing property taxes is compounded by broader cuts in transportation, infrastructure and culture at the federal, state and local levels, he said.

“There is no money for nonprofits that are going to the neighborhood, providing music, art and those things museums are all at the edge of bankruptcy,” said Pérez, the chairman, founder and CEO of Related Group.

“My concern is that we don't provide all the cultural background that we've had to the future generations if we make stupid cuts just for the short-term thinking that you're going to save a few dollars,” he added.

Florida Gov. Ron DeSantis has promoted slashing property taxes for homeowners, campaigning on it as a way to lower housing costs in a state where about 31% of homeowners pay more than 30% of their income on housing, second only to California, according to the National Association of Home Builders.

The Florida House of Representatives passed a bill in February that would repeal property taxes on everything other than the taxes that fund public schools. Taxes on second homes, investment properties and commercial properties would remain.

The bill did not pass the state Senate, but DeSantis has said he wants to call the Florida Legislature back for a special session over the summer on property taxes to get the amendment on the ballot for voters in November.

The measure has drawn loud criticism from local politicians in Miami-Dade County's bedroom communities that have minimal commercial real estate tax bases and rely on residential property taxes to fund their services.

“I think everybody's initial reaction is, ‘I hate paying taxes,’” Higgins said. “Well, everybody hates paying taxes, but at the end of the day, your local government is providing services. I can't tell you a single thing Tallahassee does for me, but I can tell you everything our local government does for me.”