The Impact of Amendment 3 on the City of Marco Island

Amendment 3 will appear on the November 2026 general election ballot as a constitutional amendment proposing an increase to the state’s homestead exemption and a reduction in the cap on non-homesteaded properties. City officials cannot advise residents on how to vote; however, we can provide factual information to help residents make informed decisions. 

If residents look at their tax bill, they will see that about 13% of their taxes go to the City of Marco Island, 45% supports the school district, 35% supports Collier County government, and the remaining 7% fund special districts like pollution control, mosquito control, and the water management district.  Approximately 67% of the City of Marco Island’s revenue is derived from local property taxes. The remaining revenue comes primarily from state sources, including sales tax, gas tax, and cigarette tax, as well as various City fees.  Property taxes fund core community services, including law enforcement, fire and water rescue, parks, road maintenance, and stormwater management. Local property taxes stay within the local community.  

To help cities and counties better prepare for the potential impact of Amendment 3, the Florida Office of Economic and Demographic Research conducted an analysis of the projected fiscal impact on every city and county statewide should the Amendment pass. Over the next five years, Marco Island is expected to experience a revenue reduction of nearly $12 million. The table below outlines the estimated annual impact for tax years 2027–2031: 

Revenue Impact of Amendment 3 by Tax Year (Marco Island) 
2027: -$1,074,700 
2028: -$2,133,972 
2029: -$2,440,976 
2030: -$2,875,263 
2031: -$3,396,619 
Total Impact: -$11,921,530 

While these reductions will occur incrementally, the long-term effect on the City’s budget could be significant. The City’s annual budget is approximately $34 million, with Police, Fire, and Public Works accounting for $20 million of that total. Another $5 million is used to fund fleet and facilities, parks, and information technology. Four million is dedicated to debt service and capital improvements, leaving the remaining budget for finance, code enforcement, planning and zoning, legal and legislative services, and administration.   

During the first two years of Amendment 3’s implementation, the City would lose close to10% of its total revenue, reducing the annual budget from $34 million to about $30.8 million. Over the following two years, unless the state sources of revenue (sales tax, gas tax, cigarette tax) significantly increase, the City’s revenue is projected to decline again by an additional $5.3 million, further reducing the budget to approximately $25.5 million. The last time the City operated at this level was in 2017, when the City’s operating budget was $25.5 million and the millage rate was 1.9966. Today’s tax rate is1.2670 mills or 1.2670 per $1,000 of assessed value.(To calculate your own Marco Island property tax, divide your assessed property valueby 1,000 and then multiply by 1.2670.  Example: $750,000/1,000 = 750 x 1.2670 = $950.25 is the annual property tax with no homestead exemption).  

While any Citycan certainly reduce spending by $1–5 million over the next few years, residents would likely see impacts to capital investments—such as roads and parks—or reductions in staffing, which can impact response times. Although Amendment 3 includes protections for public school funding, it does not guarantee funding for public safety or infrastructure. In fact, Amendment 3 includes restrictions on how local governments may spend local tax dollars. The permitted uses listed in the bill are narrowly defined and do not include areas such as information technology, facilities maintenance, or code enforcement. 

In addition to the financial changes proposed in Amendment 3, in recent yearsthe State Legislature has enacted several related municipal requirements. In 2025, the Legislature created a State DOGE requiring local governments to provide detailed reporting on four years of property tax revenue, non-tax revenue (such as sales tax), grants, permitting fees, special assessments, and spending in public safety, water/wastewater, transportation, housing, veterans services, healthcare services, parks and recreation, and administrative costs. Marco Island complied with these requirements, demonstrating eight consecutive years of property tax roll-back. In Florida, the rollback rate is the tax rate that ensures the property tax revenue stays the same as the previous year.  

In 2026, the Legislature passed a bill requiring a supermajority vote of the City Council to maintain the existing millage rate and a unanimous vote to increase the property tax millage rate,creating a high bar for any future tax increases. Beginning in 2027, local governments must also conduct a budget reduction exercise showing the public how the City’s budgetcould be cut by ten percent. In other words, even without Amendment 3, the State is holding municipalities accountable for growth in government by creating the highest standards for increasing budgets or adding regulations. Some of this legislation is already in effect or will become effective on January 1, 2027.   

Property tax reductions will be decided by voters on November 3and I certainly hope residents will read the full text of the amendment before going to the polls. The full text of Amendment 3 is available here: _h0001Fer.docx.If after reading this article you have questions about the City’s revenue, budget, or projected impact of Amendment 3, please submit your questions to the Coastal Breeze News so the question and answer can be published to benefit all residents. The City’s first budget hearing will take place on September 10th at 5:30 PM in the Community Room at 51 Bald Eagle Drive.  

Casey Lucius started her career at the Ohio House of Representatives, then joined the U.S. Navy and was commissioned as a Naval Intelligence Officer in 1998. She served in the Pacific Grove City Council from 2012-2016. In 2017, Casey and her family moved to Naples, Florida and she began working in local government as a consultant with the Florida League of Cities, the Florida City Clerks Association, and the Florida Public Pension Trustee Association. She was hired by the City of Marco Island in 2020, where she now serves as the City Manager. Casey is married to Lieutenant Colonel Bob Lucius, USMC, Ph.D., and they have one son and too many cats.