Florida’s FY 2025-26 Budget: A Focus on Fiscal Responsibility and Tax Relief

Introduction Florida Governor Ron DeSantis has unveiled his Focus on Fiscal Responsibility Budget for Fiscal Year 2025-26, outlining a $115.6 billion spending plan that prioritizes tax relief, debt reduction, and economic growth while maintaining strong reserves of $14.6 billion. The budget reflects the governor’s commitment to cutting business taxes, reducing state debt, and investing in infrastructure, education, and environmental protection.

Tax Relief Initiatives A major highlight of the proposed budget is the $2.2 billion in tax relief, aimed at supporting businesses, homebuyers, and families.

• Elimination of the Business Rent Tax – Florida remains the only state that imposes a tax on commercial leases. DeSantis proposes a phased repeal of this tax, with a 1% reduction in 2026 and another 1% reduction in 2027, ultimately removing it by 2027. This repeal is expected to save businesses $1.6 billion annually.

• New Venture Capital Tax Credit – A $100 million corporate income tax credit incentivizing investments in research, innovation, science, and engineering.

• Sales Tax Exemption for Data Centers – A permanent extension of the sales tax exemption on data center property to encourage technological investment and artificial intelligence infrastructure growth.

• Tax Relief for Homebuyers – A one-year exemption of the intangibles tax on the first $500,000 of residential mortgages for owner-occupied homes, estimated to save $170 million.

• Sales Tax Holidays – Various temporary tax exemptions, including Freedom Month, Back-to-School, Disaster Preparedness, and Tool Time, providing Floridians with $296 million in temporary tax relief.

Debt Reduction and Reserves The budget includes $830 million in debt reduction, with $600 million directed toward tax-supported debt and $230 million allocated to pay off Florida Forever and Everglades bonds. With this investment, the state will have reduced nearly 50% of its tax-supported debt by 2026. Florida also maintains a AAA credit rating from all major agencies, surpassing the U.S. government’s rating.

Florida’s $14.6 billion in reserves is allocated as follows:

• $4.2 billion in unallocated General Revenue

• $4.9 billion in the Budget Stabilization Fund

• $2.3 billion in unallocated Trust Funds

• $1.0 billion for Emergency Preparedness and Response

• $2.2 billion for reinsurance assistance programs

Investment in Education Florida’s budget makes significant investments in education, emphasizing workforce development, school choice, and early learning programs.

• Teacher Pay Raises – A $1.5 billion allocation for teacher salary increases, benefiting educators and instructional personnel.

• Historic K-12 Investment – $29.7 billion, with a record $16.1 billion in state funding for public schools, including the Family Empowerment Scholarship Program.

• Early Childhood Education – $1.76 billion for early education, including $465.8 million for Voluntary Pre-Kindergarten (VPK) programs.

• Higher Education Funding – $1.7 billion for state colleges and $3.9 billion for state universities, including $100 million for faculty recruitment.

• School Safety and Mental Health – $300 million for school safety, $190 million for mental health services, and $6.5 million for the Guardian Program.

• Civics and Literacy Programs – Funding for the Florida Debate Initiative, the New Worlds Scholarship Program, and the Florida Civics Seal of Excellence Program.

Environmental and Infrastructure Investments The budget commits over $1.5 billion to environmental initiatives, emphasizing Everglades restoration, water quality improvements, and coastal resilience.

• Everglades Restoration – $805 million for critical restoration projects.

• Water Quality – $550 million for water infrastructure and algae mitigation.

• Florida Forever Land Conservation – $100 million to acquire and protect natural lands.

• Transportation and Infrastructure – $14.8 billion for the Florida Department of Transportation (FDOT), including $5.7 billion for highway construction and $1.6 billion for resurfacing projects.

• Disaster Preparedness and Emergency Management – $1.24 billion allocated for disaster response and mitigation.

Public Safety and Law Enforcement Support The budget strengthens Florida’s law enforcement and correctional systems with increased funding.

• Law Enforcement Pay Increases – $118.3 million for raises, including 20% increases for entry-level officers and 25% increases for veteran officers and firefighters.

• Corrections and Crime Prevention – $11 million for correctional facility safety improvements and $10 million for fentanyl eradication efforts.

• Election Integrity – $1.7 million for the Election Crime Unit and $2.5 million for voter registration modernization.

Economic Growth and Housing Support The budget includes funding for workforce development, small businesses, and affordable housing initiatives.

• Job Creation – $75 million for the Florida Job Growth Grant Fund and $80 million for VISIT FLORIDA tourism promotion.

• Affordable Housing – $500 million in funding, including $227.7 million for the State Apartment Incentive Loan (SAIL) program and $100 million for the Hometown Heroes Housing Program.

• Workforce Development – $766 million for technical education, apprenticeships, and career training programs.

Conclusion Governor DeSantis’ Focus on Fiscal Responsibility Budget continues Florida’s commitment to low taxes, economic growth, and sound financial management. With historic tax relief, record education funding, environmental conservation, and strong investments in public safety and infrastructure, the FY 2025-26 budget reinforces Florida’s position as a national leader in economic and fiscal policy.

As the legislative process unfolds, stakeholders will debate the impact of these initiatives on Florida’s economy, businesses, and families, shaping the state’s financial future for years to come.

© 2025 Jeanette Moffa. All Rights Reserved.