How Your Property Taxes Fund City Services
Last Updated: Aug. 20
How Revenue Changes Shape City Services
Changes in future revenues can affect the resources available to provide City services. This guide illustrates how a projected $20 million reduction in revenue could affect future budgets and translates the city’s contingency plan into examples of potential impacts to services residents use and experience.
A proposed constitutional amendment related to Florida's property tax system, CS/HJR 1-F, will appear on the Nov. 3, 2026, General Election ballot.
If approved by at least 60% of voters, the amendment would make changes to Florida's property tax system beginning Jan. 1, 2027, including changes to homestead exemptions and other property tax provisions.
City of Clearwater leaders are reviewing the amendment and related legislation to better understand potential impacts to city operations and funding.
Based on preliminary estimates from the Pinellas County Property Appraiser, the city could face an estimated reduction in Ad Valorem revenue of approximately $12 million in the first year and an additional $8 million the following year, if the amendment is approved by voters. These estimates are preliminary and may change as additional information becomes available. [Source: Pinellas County Property Appraiser website]
The city is continuing to evaluate potential impacts. No decisions have been made regarding service reductions. Any future decisions would be made through the public budget process.
City Budget Process
FY2028 Contingency Budget Memo
Ad Valorem Revenue (Property Taxes)
Property taxes are based on the taxable value of real property. They can generally be used to support a broad range of city services and operations.
What It Can Fund
- Police services
- Fire rescue services
- Parks and recreation
- Libraries
- Planning and development
- Code compliance
- Traffic operations, road and sidewalk maintenance, and urban forestry
- Administrative and support services
Non Ad-Valorem Revenue (Other Funding Sources)
This type of revenue source is not based on property value and is often collected for a specific purpose. Many non-ad valorem revenues are legally restricted and generally cannot be redirected to fund unrelated city services or replace property tax revenue.
Examples
- Water utility fees
- Stormwater fees
- Solid waste fees
What It Can Fund
Generally, only the purpose for which the revenue was collected.
Examples:
- Stormwater fees support stormwater infrastructure and maintenance.
- Solid waste fees support trash and recycling collection and disposal services.
- Water and wastewater revenues support utility operations and infrastructure.
The city’s funding sources may vary by program, project or service. The examples below are intended to provide a general overview of how city revenues are currently used.
Property Tax Frequently Asked Questions
What are property taxes and why do cities rely on them?
Property (Ad Valorem) taxes are taxes on real estate(land and buildings). Local taxing authorities, such as municipalities, county governments, and school districts, rely on them because they are a revenue source that funds essential services including police, fire protection, roads, parks, libraries, and schools.
Who pays property taxes?
Property owners pay property taxes. Renters typically do not pay them directly, but property taxes can affect rent prices.
Which city services are funded directly by property taxes?
The city’s general fund departments are all funded by property taxes, which include Police, Parks & Recreation, Fire & Rescue, Public Works, Administration (such as City Management, Finance, Public Communications, and the City Attorney’s Office), Planning & Development, and the Library System. Property taxes remain the largest source of funding for the city’s general fund.
How are property taxes determined?
The total property tax bill for a property is determined by the taxable value and millage rate of each taxing authority. The taxable value is the final amount on which property taxes are calculated, which includes any applicable property exemptions.
What is the millage rate?
The millage rate is the number used to calculate a final tax bill from each taxing authority, where one mill equals $1 in tax for every $1,000 of a property’s taxable value (i.e. the city’s millage rate is 5.8850, which would result in the city’s portion of a property tax bill being $588.50 for a property with a taxable value of $100,000).
Who sets the property tax (millage) rate?
Each taxing authority (usually elected governing bodies) approves their own millage rate during the annual budget process. The millage rate is determined by fiscal need, to fund costs for public services including salaries and personnel benefits, program expenses, and funding for capital projects.
How much does the city of Clearwater receive in property taxes?
The city anticipates receiving approximately $109,177,090 in property taxes for Fiscal Year 2026, of which approximately 30% is from homestead (primary residence) properties.
We understand residents may have questions about what this could mean for Clearwater. The city will continue to update this page with factual information as additional analyses become available.
The city of Clearwater does not support or oppose any constitutional amendment, ballot measure, candidate, or political campaign.
This information is provided solely to explain the proposed amendment and how Florida’s property tax system could change if the amendment is approved by Florida voters.
Current Florida property tax laws remain in effect unless and until the amendment is approved by at least 60% of Florida voters.