The blue tsunami that swept across the country on election day petered out in Florida, where voters continued to elected Republicans to statewide offices and approved a massive cut to their property tax bills.Amendment 3 expands the so-called homestead exemption, shielding more of a home’s assessed value from taxation. It will nearly triple from $51,400 currently to $150,000 in 2027 and increase again to $250,000 in 2028. It also lowers the cap on annual assessments on rental and commercial properties from a 10% hike to 5%. The amendment doesn’t apply to school-related property taxes but creates a path for abolishing non-school property taxes completely. State economists have projected that local governments will lose nearly $5 billion in the first year and nearly $12 billion a year once the exemption is fully phased in. But while Amendment 3 requires remaining tax revenue go toward public safety and other local services, it doesn’t mandate that police, fire and emergency medical services be funded first or that they receive a minimum level of funding. Proponents argued that lowering property tax bills would provide relief as higher inflation worsens the cost of living. But sheriffs, police chiefs, fire chiefs and local government officials came out against the plan as they face a steep hit to their budgets.To be sure, local governments can raise revenue in other ways, such sales taxes and fees. But they can crash in bad economic times and are unlikely to completely offset losses from Amendment 3.“In the end, though, essential services would still almost certainly be affected,” University of Tampa economists Abigail Hall and Aaron Wood wrote in the Conversation. “Funding for police, fire and emergency medical services is primarily the responsibility of local governments, and, for most counties, they make up the largest line item in their annual expenditures. Reducing property taxes would amount to a direct hit, especially in smaller, less-populated counties.”Leading up to election day, Pinellas County Sheriff Bob Gualtieri estimated the county’s general fund could lose about $180 million in the first year after the measure passes, adding that the sheriff’s office accounts for half of the county’s spending, which mostly covers personnel costs.That means the county could have fewer deputies available to respond to calls, with community policing programs, marine patrols and K-9 units also facing cuts, he warned. In addition, the county’s emergency medical services fund could suffer a $20 million reduction.“I think there’s no doubt — zero — that there has to be position cuts,” Gualtieri told WLRN last month.Outgoing Florida Gov. Ron DeSantis, who backed Amendment 3, has dismissed such warnings as “fearmongering” and suggested state grants could offset any budget shortfalls to local agencies. Florida Realtors, another backer, insisted the measure could be implemented without compromising the essential services.Still, some details are lacking, and a special session of the legislature could be called to spell out exactly how the amendment will work.Jeff Brandes, a former Republican state senator and president of the Florida Policy Project, wrote in an op-ed for Florida Politics on Friday that grants can’t fill recurring revenue shortfalls.And unlike big cities like Miami, which can hike hotel taxes and lean on other tourism-related sources, small inland towns have fewer options to generate tax revenue.He pointed to research from the Florida League of Cities, which found that at least 90% of homestead values will no longer be taxable in 108 of Florida’s 411 cities. And in 33 counties, at least seven in 10 homesteads fall below the $250,000 exemption limit.“The amendment itself sends no reimbursement to fiscally constrained counties, the poorest and most rural places with the least room to absorb a loss, and nothing in the amendment guarantees that police and fire will be protected,” Brandes said.“That is how rural Florida slides into rural dark ages: slower emergency response, crumbling roads, shorter library hours, shuttered recreation programs. Fewer services discourage investment. Less investment thins the tax base. A thinner tax base means fewer services. The dark ages won’t arrive all at once. They’ll arrive one closed fire station at a time.”Because fire departments could see drastic cuts, Florida homeowners may end up paying higher insurance bills, offsetting savings from property taxes.Insurance Services Office, a private insurance-data company, evaluates local fire protection and assigns ratings that insurers can use in underwriting.“A reduction in fire protection services in a community can lead to a lower ISO rating,” a spokesman for the Insurance Information Institute told Bloomberg. “The ISO rating is among numerous risk factors property insurers use to underwrite homes in Florida and could potentially cause premiums to increase if the rating is downgraded.”Amendment 3’s effects could extend to the state’s broader economy as well. In a pre-election analysis from the Tax Foundation, the think tank described the measure as not just a tax cut, but a fundamental restructuring of local government finance.Since Florida doesn’t a state income tax, property taxes are a reliable source of revenue, even in economic downturns, and they reduce need for higher taxes on labor, entrepreneurship, capital formation, and consumer spending, it said. “The elimination of a substantial portion of the property tax base does not eliminate the cost of local government services,” the Tax Foundation pointed out. “Amendment 3 would create highly distortive tax shifts, change who pays, and change how those costs are distributed. The result would be economically harmful both to Florida communities and the state overall.”This story was originally featured on Fortune.com