Understanding the Property Tax Amendment and Its Potential Impacts

A proposed constitutional amendment (Amendment 3) on the November 3 general election ballot in Florida could change how property taxes are applied to homesteaded property and how local government services are funded. 

If enacted, Amendment 3 would significantly reduce the revenues cities and counties rely on to provide essential services.

If the ballot measure is approved, the City of Melbourne would experience a funding gap of approximately $10.1 million* in FY2028 and an additional $4.9 million* in FY2029, for a combined total of $15 million* in the City’s operating budget.

This could affect the City’s ability provide the services that Melbourne’s residents expect and rely on, including police, fire, parks and recreation, emergency management, roads, and more. 

*Using 2026 tax roll data.

What is Amendment 3?

Amendment 3 proposes significant constitutional changes to Florida’s property tax system.

The measure was approved by the Florida Legislature on June 2, 2026, and will appear on the November 3, 2026, ballot. If approved by at least 60% of voters statewide, the amendment would take effect January 1, 2027.

The proposed amendment:

  • Increases the homestead exemption from $50,000 to $150,000 beginning January 1, 2027, and to $250,000 beginning January 1, 2028
  • Requires the Legislature to establish a schedule for the full elimination of homestead property taxes
  • Excludes school district levies from the increased exemption
  • Reduces the cap on annual assessment increases for non-homestead properties from 10% to 5%
  • Allows property tax revenue to fund operations of county and municipal governments, including constitutional county officers, county commissions, city governments, and expenditures approved by local elected officials, unless a specific expenditure is prohibited by state law
  • Requires new Florida residents (after January 1, 2027) to wait five years before qualifying for the increased exemption

How would Amendment 3 affect City services?

Property taxes are the largest single source of funding for City of Melbourne operations.

Amendment 3 currently has no guaranteed replacement funding plan.

All local services could be impacted in some way if the amendment passes, including police and fire, hurricane and storm emergency response and recovery, streets and sidewalk maintenance, parks and recreation, and many other services.

When would the financial impact take effect?

If Amendment 3 is approved, changes would take effect beginning with the fiscal year that starts on October 1, 2027.

Which services and programs could be cut or reduced?

Amendment 3 would reduce funding available for City services, such as: 

  • Public Safety (Police and Fire) 
  • Hurricane response and recovery (clearing roads, repairing traffic signals, providing sandbags, removing residential disaster debris) 
  • Roadway and sidewalk maintenance
  • Park maintenance
  • Recreation centers, including programming for children, adults and seniors
  • Athletic fields, pools, and tennis/pickleball courts
  • Community events, including MelBOOM, the annual 4th of July fireworks celebration

In addition, the City may need to sunset its two CRA districts early. 

Is there an exception in the amendment that protects Police and Fire budgets? 

No. Police and Fire budgets could be reduced if Amendment 3 passes. 

While the original version of the bill protected public safety services, the final bill that the Legislature passed did not include protections for Police, Fire and Emergency Services budgets. The only portion of your tax dollar that was protected from additional homestead exemptions was Brevard Public Schools.

What is the City doing to prepare for possible voter approval of the amendment?

Sound fiscal management requires the City to anticipate changes and begin preparing now. We are reviewing three options: 

  1. An increase in other taxes, fees, or other charges for services,
  2. A decrease in the levels of service provided to the City’s residents, and
  3. A combination of both.

During the June 9, 2026, City Council meeting, staff presented the impact to the City's revenue as well as potential impacts that will need to be considered in future budgets. View a recording of this presentation and discussion (click on Item 17 below the video or start the video at 1:28:30). 

Will there be new fees?

If the amendment is approved, to offset the loss of property tax revenue, the City will consider efficiencies, service reductions and alternative revenue sources, including increased fees. 

How does the City ensure transparency in the budget process?

Property tax dollars assessed on Melbourne properties stay in Melbourne. Residents can see their tax dollars at work every day and can directly hold their elected officials accountable.

We make our budget and financial information publicly available online so that residents can review it at any time. Our current budget and budgets for the previous four fiscal years are available on the Budget page. 

The budget process, the millage rate, and the budget are discussed during public meetings:

  • During the June 9 regular meeting, City Council discussed the potential effects of Amendment 3 on the City’s budget, as well as the upcoming FY2027 budget process. This public meeting was live-streamed, and a recording of the discussion can be viewed on our website (click on Item 17 below the video or start the video at 1:28:30).

City finances are audited annually by independent auditors. Audit reports are posted on our website.

The City consistently receives national awards from the Government Finance Officers Association (GFOA) for its financial reporting, reflecting a strong commitment to transparency and best practices.

 

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