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The Florida legislature recently introduced a constitutional amendment that will change how communities fund essential activities like stormwater management. In November, voters will vote on Florida Amendment 3, the Homestead Tax Exemptions, Property Assessments, and Spending Restrictions Amendment (2026).
This proposed Amendment makes sweeping changes to how property tax revenue is collected and spent. These changes include the following:
With the combination of an expansion in homestead exemptions and a reduction in the amount of allowable tax increase to make up the difference, it is estimated that if this Amendment passes, local government revenue would be reduced by $4.6 billion in fiscal year 2027-28 and $8.4 billion in fiscal year 2028-29.
While this amendment does not change how communities can recover costs for stormwater, it does significantly reduce tax revenue for communities, which would result in competition among city priorities for General Fund dollars.
Currently, most communities fund stormwater management activities through a General Fund allocation or a dedicated special assessment/utility fee. There are clear advantages to the special assessment/utility fee approach. Under a General Fund allocation model, stormwater funding can vary annually based on the perceived priority of the community's stormwater needs relative to other services that year, making it difficult to plan maintenance operations and capital improvements. A General Fund allocation model creates a structural inequity: tax-exempt properties use the stormwater system but are entirely excluded from its funding. Only taxable parcels bear the cost, regardless of their actual share of stormwater demand.
Florida employs two benefit-based funding mechanisms for stormwater services. Non-ad valorem special assessments are levied on the property tax bill and tied to the benefit a parcel receives from the service, independent of property value. Stormwater utility fees follow the same benefit-based logic but are billed to property owners on a separate utility bill rather than on the tax roll.
Under a dedicated special assessment/utility fee funding model, the community establishes an enterprise fund that is supported by stormwater user fees. Typically, these stormwater fees are based on a property's impervious area characteristics. This funding option is more stable, allowing for better planning for stormwater management. In addition, all properties that place a demand on the stormwater system – including tax-exempt parcels – contribute to stormwater funding.
Thousands of Florida municipalities and counties continue to fund stormwater services through general fund ad valorem property taxes rather than a dedicated fee, but given the potential passage of Amendment 3, some communities are considering changing their stormwater funding approach.
If approved by voters, Florida Amendment 3 would require local governments without dedicated stormwater fees to face tough choices on how best to spend increasingly limited dollars. Communities may need to defer stormwater operations and maintenance spending. Cutting routine upkeep could lead to localized flooding, water pollution, and asset degradation or failure. Deferring maintenance also drives up total system costs, as emergency repairs following asset failures can be significantly more costly than proactive maintenance. Postponing capital improvements shortens asset life cycles, turning predictable renewal schedules into premature, unbudgeted capital replacements.
The general fund pressure created by Amendment 3 extends well beyond stormwater. For a broader look at how Florida communities can model the full fiscal impact, including reserve depletion timelines and service-level tradeoffs, see our companion article, When the property tax floor drops: A decision support approach to municipal general fund sustainability.
These infrastructure vulnerabilities coincide with an increasingly stringent regulatory environment from the Florida Department of Environmental Protection (FDEP) and regional Water Management Districts (WMDs), including stricter nutrient-reduction requirements and water quality improvements. Without reliable funding for regulatory mandates, communities could face administrative fines, state consent orders, and litigation risks.
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Establishing a stormwater utility under Florida Statutes creates an independent revenue stream separate from ad valorem property taxes. This mechanism creates an enterprise fund legally restricted to stormwater operations, maintenance, planning, and capital improvements. The utility establishes equitable cost distribution by apportioning stormwater fees based upon a property’s demand on the system across all developed parcels. Transitioning stormwater funding to a dedicated enterprise fund structure relieves the general fund of this cost burden, preserving scarce property tax revenues for other essential services.
As communities look to change how they fund stormwater-related activities and explore stormwater utility funding, there are several important next steps.
Phase 1: Fiscal assessment
Phase 2: Feasibility and implementation plan
Phase 3: Public education and stakeholder engagement
Phase 4: Legislative and administrative adoption
Establishing a new stormwater utility is typically a 10- to 16-month process, so it’s important to start planning early. Raftelis’ Stormwater Practice has extensive experience implementing new stormwater utilities in Florida and across the country.
We welcome the opportunity to support your community through this process - contact us to learn more.
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