A proposed constitutional amendment that would exempt homestead properties from property taxation could strip tens of millions of dollars from Okaloosa County’s general fund and force the elimination or reduction of services ranging from public safety to mosquito control, said District 2 County Commissioner Carolyn Ketchel.

• The amendment will appear on the Nov. 3 ballot. If approved by at least 60% of voters, it would take effect Jan. 1, 2027, exempting homestead properties from taxation and requiring local governments to direct remaining property tax revenue solely toward core public needs, including public safety, education, infrastructure and natural resources.

“Make no mistake, the ballot language is misleading to the reality of what will happen in counties throughout Florida,” Ketchel wrote.

According to Ketchel’s analysis, the county’s general fund would lose approximately $14.5 million in its first year and roughly $24 million by year two. The second-year impact, she said, would leave approximately $2.5 million to fund county services beyond core obligations.

Those figures are consistent with warnings County Administrator John Hofstad delivered during budget workshops this summer. In a July 7 budget presentation, Hofstad told commissioners the amendment could cut property tax revenue by 23%.

“23% is a huge burden,” Hofstad said at the time.

Current revenue and services at stake

The county’s current property tax millage rate of 3.8308 mils (which commissioners have held steady for 11 consecutive years) generates approximately $114.7 million in revenue. An additional $3.8 million comes from the non-countywide Municipal Services Taxing Unit at a rate of 0.2880 mils, bringing total general fund revenue to approximately $118.7 million.

Ketchel said the general fund pays for services residents have come to expect from county government, and that the proposed amendment would put many of them at risk.

• “First and foremost Okaloosa County citizens expect public safety, which means when you dial 911 we expect rapid response from our sheriff and EMS,” Ketchel wrote. “The passage of this measure will force us to consider reducing funding and would most certainly not be able to continue at the FY 2026 level.”

Ketchel listed a range of services that could face reductions or elimination, including funding to the Okaloosa County Sheriff’s Office, emergency management, school resource officers, beach safety and park rangers, corrections, veterans services, solid waste, mosquito control, animal services, library funding, parks and roads and bridges.

“Can you imagine living here without it?” Ketchel said, referring to mosquito control.

Why other county funds can’t fill the gap

A common question, Ketchel said, is why the county can’t simply use other revenue sources to fill the gap. She said it doesn’t work that way.

Enterprise funds generated by departments such as airports, water and sewer and tourism are restricted by law to their respective operations, she said. Tourism dollars cannot be used to build roads, and airport revenue cannot fund lifeguards.

Hofstad made the same point during the July 7 budget workshop.

• “I can’t take water and sewer dollars or airport dollars or TDD dollars and balance the general fund budget,” Hofstad said. “That’s just not the way municipal budgeting and county budgeting works.”

Hofstad also told commissioners during that workshop that a hiring freeze for non-essential general fund positions would remain in place until the results of the November election are known.

“I don’t want to launch into adding new positions or taking on additional general fund capital projects until I know the results of the referendum in November,” he said.

Amendment already factoring into budget decisions

The uncertainty surrounding the ballot measure has already factored into recent commission decisions. During an Aug. 4 meeting on the county’s new in-house animal control operation, Ketchel tied the county’s cautious approach directly to the amendment.

“The issue for us is cost,” Ketchel said. “We’re all nervous about every aspect of county government because we’re not going to have the money for services that we currently have, let alone beginning new services.”

And during a July 21 discussion over the county’s school resource officer funding, Ketchel pushed back against a proposal to lower the millage rate, calling the November measure the overriding concern.

“We’ve got a huge elephant in the room in November on the ballot,” Ketchel said.

No additional funding expected

Ketchel said voters should not expect the state to backfill lost local revenue.

“There is no cavalry coming from the statehouse with extra money,” Ketchel wrote. “This will be it for local funding, and the quality of services we have enjoyed will be eliminated or reduced greatly.”

She also argued that the amendment’s one-size-fits-all approach fails to account for the differences among Florida’s 67 counties.

• “The needs of Miami and Tampa are different than those on the Panhandle,” Ketchel wrote. “Local government is closest to the people.”

Ketchel said if the homestead exemption passes, the county will have to offset the lost revenue through service cuts or increases in other taxes.

“As you cast your vote, I encourage you to thoroughly consider the benefits and disadvantages of voting for or against this initiative,” she wrote. “Please understand that we must off-set the lost revenue somehow, either by loss of services or increase in some other tax.  Make no mistake, if this initiative passes there will be significant changes to how local government functions in Okaloosa County.”