But while this proposal is promoted as a lifeguard for the owners, in Miami-Dade voices of warning arise to warn that they could be opening the way to an inappropriate patch, one that not only offers limited fiscal relief, but also ignores the causes of high tax pressure on citizens.
The budding standard puts a bitter drop in the travel and leisure industry, because, in essence, a drastic and controversial restructuring of the Tourism Development Tax (TDT) – known as the ‘hotel tax’.
The initiative that passed to the state Senate lit a high voltage debate, facing those who cry out for an immediate relief to the suffocating fiscal burden of Floridan residents against a tourist industry that sees in the proposal an existential threat and a potential “economic suicide.”
In the epicenter of this dispute is the proposal to divert, as of 2026, 75% of the income collected by the DTT towards the creation of tax credits aimed at reducing the property tax paid by citizens.
This measure would only leave 25% to finance the promotion, marketing and tour development plans, a model that has been the pillar of exponential growth of the hospitality sector for more than three decades.
But the proposal, promoted by the Budget Committee of the House of Representatives, goes further: it contemplates the gradual dissolution of the 62 Tourism Development Councils (TDC) that operate throughout the State, with a deadline before December 1.
Additionally, the legal provision would eliminate the obligation, in force since 1991, that the counties allocate a minimum of 40% of the DTT funds to advertising and marketing campaigns.
The representative Wyman Duggan (R-Jacksonville), one of the most fervent promoters of the reform, defends it as a peremptory response to “relieve the affordability crisis facing the Floridans.”
A prospective analysis of Florida Policy Institute suggests that this redistribution of funds could be translated into an average savings of about $ 150 per year in the bill of the property tax for each home in counties with high tourist density, such as Miami-Dade.
Lawrence McClure, president of the Chamber’s Media and Arbitration Committee, seconded this vision and described the DTT as a “hidden tax” that, indirectly already through the increase in goods and services, ends up being paid by the residents themselves.
This new legislative attempt does not arise from nothing and resonates with the spirit of HB 1221, a similar proposal that advocated a fixed scheme of 75/25, which was postponed indefinitely on May 3.
Unlike its predecessor, HB 7033 introduces a flexibility nuance, allowing local governments to use 25% residual DTT for previously approved tourism projects, although it imposes a tax prohibition for the renewal of Marketing contracts in force.
Battle without truce
The reaction of the tourism sector, which contributes approximately 15% of the state gross domestic product (GDP), was swift and its forcefulness has been remarkable.
“This could reverse decades of growth and prosperity,” said Julissa Kepner, president of the Bureau of Bureau of Conventions and Tourism of the Great Miami (GMCVB), in statements daily Las Américas.
Kepner stressed that DTT is not only a background for advertising, but the source of financing for a wide range of essential activities: from international cultural events and the maintenance of beaches that are the Florida magnet, to the operation of the convention centers.
Economic projections paint a gloomy panorama if the law thrives. A study by the University of Central Florida (UCF) estimates a 12% drop in the hotel occupancy at the state level during the first two years of application of the measure, as a direct consequence of the marketing investment cut.
In Miami-Dade County, where tourism is the direct support of 200,000 jobs, the announced dissolution of the TDC is perceived with special alarm in some municipalities whose ability to promote their local attractions depends on these funds.
The Orlando Chamber of Commerce, another tourist giant, estimates that 43% of international visitors choose Florida as destination, influenced by promotional campaigns financed with the DTT.
Even Visit Florida, the official tourism agency of the State, although it would not be directly affected by the dissolution of the TDC, launched a warning about the possible “fragmentation of the Florida brand” if the centralized coordination in the promotion is lost.
Kepner also brought up the crucial role played by the DTT during the health crisis of the COVID-19.
“During the pandemic,” he recalled, “the DTT allowed to inject 5 million dollars into campaigns to reactivate internal tourism, which accelerated the recovery of 78% of hotel jobs by 2022. Without this financial mattress, future crises could have much more severe and prolonged impacts on our economy.”
“More is required”
In the midst of this legislative storm of state reach, Tomás Regalado, appraiser of the property of Miami-Dade, in an interview with this morning, offered a nuanced perspective, but very relevant from its land.
Although Regalado said that “any relief given to residents is welcome,” the head of this constitutional office raised doubts about the sufficiency of HB 7033 as the only solution to the problem of fiscal burden.
“It seems to me that cutting funds to tourism would not be enough” to significantly relieve taxpayers, he argued, after considering that only in Florida there are “five million people who have homestead exemption” and many of them already face serious economic difficulties.
He said that, only in Miami-Dade, “we have about 300,000 properties that have homestead”, and “most (…) have problems paying taxes.”
Regalado said to see the proposal of HB 7033 as “one of the many initiatives” that are considered in Tallahassee, capital of the Floridan state and headquarters of the state congress.
In fact, he revealed that his office actively collaborates with the legislature: “The select committee that was created by the Chamber of the Chamber (…) is analyzing many proposals, and we are in contact with the members of that select committee because they have asked us for help from the data point of view that our office only has.”
The appraiser estimated that this concrete proposal of the DTT could be postponed. “It may be presented to the legislature next year,” suggesting a more leisurely calendar for its final debate.
For Regalado, a much more direct and effective battle front for the fiscal relief of the owners resides in the amillation rates (Millage Rates), a mathematical formula that is used to establish the value of this tax.
“We are the first stop for taxes, but the final decision is made by cities, the county and the bureau of schools,” he explained, pointing to the true architects of the final tax burden.
In this sense, Regalado announced a personal commitment: “I too (as his predecessor did in office, Pedro García) I will advocate so that the amillaration falls down, or at least they do not upload it.”
The HB 7033 project also has the support of the Think Tank Florida Taxwatch, which considers it a “necessary modernization”, and cites surveys that indicate that 68% of Floridans would support would divert tourist funds to local services.
As for Governor Ron Desantis, although he has not issued an official pronouncement on this Law in particular, sources close to his office have suggested that any proposal that eliminates the financing of tourist marketing could veto.
Scenarios and future at stake
The HB 7033 project, in an attempt to mitigate the resistance climate, includes a transition period until 2026 so that the counties make the necessary budgetary adjustments, as well as clauses that would allow refinancing existing debts linked to projects financed with TDT, thus avoiding a possible default in emitted bonds.
It also contemplates exceptions for sports megaeventos such as the Super Bowl or the Miami Grand Prix.
Analysts of the Morgan & Morgan Legal firm glimpse three main scenarios: first, an approval of the project without substantial modifications, which, in his opinion, could trigger a wave of judicial lawsuits by the tourist counties, including Miami-Dade.
Second, a negotiation in the Senate that could result in an increase in the percentage for tourism (perhaps up to 40%) and the maintenance of TDC with reduced functions; And, third, a government veto if the business groups manage to demonstrate in a reliably the macroeconomic risks that the measure would imply.
Accommodation tax
It is worth noting that the DTT applies to overnight stays in hotels, vacation rentals and other short -term accommodations.
The counties raise these income to finance a wide range of activities related to tourism, which include destination marketing, expansions of convention centers, beaches restoration, cultural programs and tourist infrastructure.
The model is nothing complex for the promoters of this industry: since the tax is generated by visitors, income is reinvested in promoting and improving the same sector that attracts them. It is a self -sufficient scheme that has allowed Florida cities and counties to compete globally by visitors, and the jobs and expenses they bring.
Florida is, therefore, in a complex crossroads. The balance must weigh between offering immediate and tangible fiscal relief to its residents, overwhelmed by inflation and the increase in the cost of living, and protect the long -term sustainability of a sector that is the jewel of its economic crown.
While legislators evaluate an unpopular measure among tourism representatives, and voices such as the one of the gifted appraiser point to more structural solutions in local fiscal management, Florida’s future as a tourist destination could be fighting a thread.
