Florida Enacts Stricter Limits on Local Government Tax and Fee Increases

TALLAHASSEE, Fla. — Governor Ron DeSantis signed two bills into law on May 15 that will make it more difficult for Florida’s city and county governments to raise property taxes and other local fees. The new legislation imposes stricter voting requirements on local officials and is designed to increase transparency for taxpayers, representing a significant shift in the balance of power between state and local authorities on fiscal matters.

The new laws, HB 7073 and HB 1195, were approved by the governor as part of a broader push for tax relief that he has championed. Both measures aim to curb what DeSantis described as potential “runaway” spending by local governments, providing what he termed a safeguard for residents and business owners against rising costs.

HB 7073 specifically targets property taxes. Under the new law, city and county commissions will require a two-thirds supermajority vote to increase a property-tax rate, a higher threshold than the simple majority previously required for many increases. The law tightens rules around the “rolled-back rate,” which is the millage rate that would generate the same amount of property tax revenue as the prior year, excluding new construction. Any proposal to exceed this rate will now face the heightened voting requirement.

Furthermore, the bill overhauls the “Truth in Millage” (TRIM) notices that property owners receive annually. These notices must now include more explicit information about the financial impact of proposed tax hikes. For instance, the notices will be required to show how a proposed increase would affect a homesteaded property with a taxable value of $325,000, providing a standardized and more tangible example for taxpayers to understand the real-dollar consequences of a rate change.

The second bill, HB 1195, addresses a wide range of non-property tax fees, including impact fees, which are levied on new development projects to fund infrastructure like roads, schools, and parks. The law mandates that any increase to most local fees will require a simple majority vote by the governing body. However, for impact fees, the bill imposes the same supermajority requirement as the property tax law, demanding a two-thirds vote for any increase. Local governments will also be limited to raising such fees only once per year and must provide detailed public justification linking the fee amount directly to the cost of the service or infrastructure it is intended to fund.

Business groups, including the Florida Chamber of Commerce and the conservative fiscal watchdog group Florida TaxWatch, have praised the legislation. Supporters argue the laws will instill greater fiscal discipline in local governments, increase accountability to taxpayers, and create a more predictable and stable tax environment for businesses operating in the state. They contend that unchecked local tax and fee increases can stifle economic growth and place undue burdens on small and mid-sized companies.

Conversely, organizations representing local governments, such as the Florida League of Cities and the Florida Association of Counties, strongly opposed the bills. They argue that the legislation undermines the principle of “home rule,” stripping authority from locally elected officials who are best positioned to understand and respond to their communities’ needs. Opponents warn that the supermajority requirements could hamstring their ability to fund essential services, including law enforcement, fire rescue, and critical infrastructure maintenance, particularly in rapidly growing areas where demand for public services is escalating.

For Florida businesses, the implications are direct but multifaceted. Companies that own commercial real estate may see more stability in their annual property tax bills, making it easier to forecast long-term operational costs. Likewise, real estate developers and construction firms could benefit from the higher barrier to raising impact fees, potentially making new projects more financially viable. However, all businesses rely on the public infrastructure and services funded by these local revenues. If cities and counties struggle to secure funding for road repairs, public safety, or water systems, it could create significant indirect costs and operational challenges for companies across all sectors.

While the promise of lower and more predictable local taxes is appealing to any business owner, these new laws introduce a new layer of complexity to financial forecasting. In our experience, when governments are restricted in one area of revenue generation, they often become more creative and aggressive in others. This could manifest as new types of fees, stricter enforcement of existing regulations, or service-level reductions that create indirect costs for businesses. Simply celebrating a potential tax ceiling is not a strategy. Business leaders must now pay closer attention to local municipal finance, as the changes could be subtle but significant. Proactive financial modeling and risk assessment are more critical than ever. For companies navigating these new local tax complexities in Florida, C&S Finance Group LLC offers expert tax preparation and compliance services to clarify the direct impact on your operations and help you plan effectively. You can learn more at csfinancegroup.com.

The new laws are scheduled to take effect on July 1, just as many local governments begin their intensive budget-planning processes for the upcoming fiscal year. Observers will be closely watching how Florida’s counties and municipalities adapt to these new constraints and whether the changes lead to service cuts, legal challenges, or innovative new funding models. The move is also widely seen as a step toward the governor's larger goal of placing a major property tax cut proposal on the statewide ballot, signaling that the tension between state and local control over taxation will remain a central issue in Florida politics.