The City of Florence has approved an ordinance to reduce the insurance premium tax rate from 5 percent to 4 percent, representing a 20 percent reduction in the current rate. The change will take effect July 1. The insurance premium tax is applied to policies written within the City and is collected and remitted by insurance companies, rather than billed directly to residents or businesses by the City of Florence.
This action marks the third tax reduction enacted by the City since 2024. In addition to the insurance premium tax change, the City reduced its property tax rate by 3 percent in both 2024 and 2025, resulting in a combined 6 percent reduction over the two-year period.
City officials note that Florence has been able to responsibly implement these reductions due to continued economic growth in the community and the City’s focus on responsible financial management.
Over the past year, the City conducted a comprehensive review of its investment practices and made adjustments to how reserves are managed. The review identified opportunities to modernize the City’s approach and better align it with current market conditions and best practices for public funds. As a result, the City implemented changes designed to improve interest earnings while continuing to maintain a conservative, safety-focused investment strategy.
City leaders say these steps help offset the impact of tax reductions while allowing Florence to maintain a balanced budget, continue funding infrastructure and capital projects, and sustain the level of services residents and businesses expect.
“I want to thank the City Council and our leadership team for working together to make this tax reduction possible for the residents and businesses of Florence,” said Mayor Julie Aubuchon. “Because our local economy remains strong and we have remained disciplined in how we manage City finances, we are able to provide meaningful tax relief while continuing to invest in our community and maintain the services people rely on.”
With this action, Florence continues its commitment to responsible financial stewardship while ensuring the community remains well positioned for future growth.
City of Florence