Goodbye Property Tax, Goodbye PublicTransit?
Voters will get the chance in November to vote on the “Save our Homes from Excessive Property Taxes” amendment which would cut property tax bills for some Florida home owners, a measure to add the amendment was passed on June 2, 2026 by the Florida Legislature in a special session. The bill is a phase out measure for property taxes for certain Floridians who claim homestead currently.
According to the Tax Foundation, “If the proposed constitutional amendment is approved by voters, legislative fiscal analysis estimates local government revenues could be reduced by $4.6 billion in the first year and by $8.4 billion in the second year, but the constitutional amendment includes no plan for how to pay for such a large tax cut.” (For more detail on the full bill read: https://taxfoundation.org/blog/florida-property-tax-proposal/)”
According to the Pinellas Suncoast Transit Authority (PSTA), property taxes currently account for 61% of PSTA’s funding. Therefore significant cuts to property tax revenue are highly likely to impact public transit in Pinellas County.
This issue could also be compounded by the significant reductions to the transportation budget proposed by the US President’s budget. The 2026 Surface Transportation Authorization Act is the primary source of funding for public transit, a crucial resource for states like Florida. On April 3, 2026, President Donald Trump submitted his Fiscal Year (FY) 2027 Budget request, which significantly reduces the transit budget to $16.3 billion (a 23% reduction) for public transit and $2.8 billion (a 82% reduction) for passenger rail in FY 2027.
To better understand why federal funding is also so important to PSTA one only needs to only look at one of its greatest successes, the SunRunner, the first rapid transit bus system in Florida. The SunRunner was funded by a $21.8 million grant awarded through the Federal Transportation Agency’s Capital Investment Grant program, the first Capital Investment Grant ever awarded to the Tampa Bay region.
Further, PSTA is one of the least funded transit agencies in both the state of Florida as well as the entire country. According to PSTA, federal grants constitute 20% of its budget. If PSTA aims to fully transform public transit in the densest county in the state, it is arguable that it requires significantly more funding, not less.
POTENTIAL SOLUTIONS TO FUNDING CUTS
In a world where there could be a reduction to both the federal transit budget and local property tax revenue, it is critical to explore viable solutions to ensure Florida’s public transit systems are funded. Particularly when we are seeing gas prices and car costs at unprecedented levels in Florida.
SALES TAX: FUNDING PUBLIC TRANSIT IN MAJOR METROPOLITAN AREAS
Many major metropolitan areas with successful public transit fund their efforts through sales tax, including New York, Chicago, Los Angeles, and Miami. In 2014, Pinellas County launched a major campaign to transition PSTA’s funding to a sales tax model. According to PSTA, this would have resulted in fewer residents bearing the burden of public transportation, as one-third of sales tax revenue is generated by tourists. This measure, along with a referendum to bring light rail to Pinellas County, ultimately failed.
Twelve years later, in the rapidly developing and highly dense Pinellas County of 2026, the question arises whether sales tax funding should be reconsidered. As tourism revenue continues to experience unforeseen declines following Hurricanes Helene and Milton, some may contend that tourism dollars are not as robust as they once were. However, if we look at the successes of Miami’s train and rapid bus transit expansions, there could be a compelling argument that this approach could be the key to successful and sustainable public transit funding in Florida.
DEVELOPMENT FEES:
INCREASES TO THE MULTIMODAL IMPACT FEE
Pinellas County currently has a Multimodal Impact Fee Ordinance (MIFO) which is used to fund plans and projects that enhance the capacity of the surrounding mobility system, including bicycle, pedestrian, transit and automobile uses. This fee is paid by developers when constructing new residential or commercial buildings.
Forward Pinellas, Pinellas County’s regional Metropolitan Planning Organization, is currently collaborating with the County and local municipalities to revise and potentially increase the MIFO to align with fees imposed in other municipalities. Thoughtful adjustments to these fees, which consider offsets for affordable housing, could be a long overdue boon to not only the County’s public transportation system, but also infrastructure for cyclists and pedestrians.
According to a recent study conducted by Forward Pinellas, the average impact fees for Commercial Developments in Pinellas County are significantly lower compared to the established fees imposed in other similarly sized counties. In fact, Pinellas County’s $2,079 impact fee per 1,000 square feet of general office space is significantly lower than Miami Dade ($14,850) and Brevard County ($6,638), and even the second lowest similar county, Polk County ($2,849).
The success of similar impact fees has helped in other jurisdictions. For instance, San Francisco established a citywide fee on new commercial, market-rate residential, and industrial developments based on the gross square footage of the project. The city’s rationale is based on a nexus study it conducted, which determined that adding 190,000 jobs and 100,000 new homes by 2040 would severely strain its existing transit network. The city reasoned that developers must pay their “fair share” to offset and invest in the community to support the new demand created by their development projects that would result in bringing workers and residents to the city. The revenue generated from these fees is entirely restricted to funding San Francisco’s Municipal Transportation Agency (Muni), ensuring that reliable public transportation, including pedestrian and bicycle infrastructure is maintained and expanded to meet the demands of a growing city.
TRANSIT ORIENTED DEVELOPMENT (TOD) INCENTIVES
TOD, or Transit-Oriented Development, is an urban development approach that aims to increase density, liveability, and walkability near high frequency public transit. When done right, TOD can transform public transit. TOD measures aim to facilitate shorter trips, less car-centric lifestyles, and more efficient use of city resources. Some urbanists support creating specific TOD zoning, a specialized municipal zoning to allow for denser, more walkable, and mixed-use development within a quarter to a half-mile radius of high-capacity public transit stations. Some municipalities have successfully used TOD to bring people, services, and activities together, by using TOD zoning in conjunction with investing in high quality public transportation, and walking and cycling infrastructure. Most recently St. Petersburg adopted its own TOD ordinance, the SunRunner TOD Zoning Overlay.
A hot topic in transit has been the emergence and promotion of state-level TOD legislation. In 2026, Florida Senate Bill 1342, known as the “Transit-Oriented Development Act” was proposed to establish specific Transit-Oriented Development (TOD) zones. These zones would mandate local governments to adopt specific development requirements in their ordinances to encourage development near public transit, including a requirement of a height maximum of no lower than sixteen stories within a quarter mile of rapid bus transit stops, such as the SunRunner, for counties with larger populations, like Pinellas County. This means that developers can build higher than they could before in Pinellas County in locations that fall within the TOD zones. Although this bill ultimately failed to pass in the 2026 legislative session, the concept of a state-level TOD may still persist for the 2027 session.
So how can TOD be a source of funding? One key concept to note about the proposed state TOD bill is that the bill does not directly address funding the transportation that runs through the new development zones. However, some jurisdictions are using TOD zoning as a way to fund transit itself, using public and private partnership to fund infrastructure costs.
An illustrative case of a city establishing a public-private partnership through an incentive program within a TOD zone is Alexandria, Virginia. Developers approached the City of Alexandria to transform a decommissioned 295-acre rail yard into a substantial 7.5 million square-foot mixed-use development. However, the site needed a new transit station at a cost of more than $240 million. The city, which lacked the full funding on its own for the transit station, negotiated a partnership with the private developers for the project. In exchange for granting extensive rezoning approvals which were required for the development, the city negotiated an exaction agreement where the developers agreed to an equity contribution of $10 per square foot for all new development built within a quarter-mile radius of the new station. This agreement ultimately generated roughly $50 million in developer contributions to help cover the upfront costs of building the rail station.
As transportation demands persist with limited funding, impact fees and TOD incentive arrangements could be a potential avenue to ensure private market demand on the public system helps supplement costs.
A TAX ON EMPLOYERS
In Florida, we have a reemployment tax paid by employers which is allocated to an Unemployment Compensation Trust Fund for the sole purpose of paying reemployment assistance benefits to eligible claimants. Use of employment tax for other measures would be an entirely novel concept to the state.
In contrast, Paris, a city known for its rejection of sky high urban development, yet which still has a highly regarded and used transit system, has its public transit funded nearly fifty percent by Versement Mobilité (VM), a tax on employers introduced in the 1970s. The tax is a specialized tax that exclusively applies to companies near the transit network with more than 11 employees, and ranges from 1.6%-2.4% of an employee’s gross wage.
The rationale behind employers paying the tax is twofold: not only can employees utilize the transit system to commute to work, which serves as an incentive for employment based on location, but the resulting traffic and pollution reduction also present an overall incentive for economic investment in the area.
According to the American Public Transportation Authority (APTA), every $1 invested in public transportation generates $5 in long-term economic return. As Pinellas County faces an increasing demand for higher-paying jobs there is an imperative for industries to expand and relocate to Pinellas County. A commitment to a significantly enhanced public transit system could be a pivotal factor in establishing a competitive and diverse job market.
LOOKING AHEAD
While many uncertainties around Federal, State, and municipal funding persist, increased development activities are continuing at unprecedented rates in Pinellas County. This growth highlights the importance of continued investment in Pinellas County’s transit system to thrive and grow, in not only bus and ferry, but also pedestrian, bicycle, and potentially light rail infrastructure. Interestingly, while some of these initiatives would likely need to be placed on the ballot for consideration, some could be implemented through private-public partnerships. Thoughtful discourse of new and novel funding sources will need to continue as we navigate uncharted territory and use our vote on this November.