TALLAHASSEE - Less than a month ago, state House and Senate leaders were talking about more property tax relief for homeowners.

This week, the Senate's top budget writer raised the specter of raising the tax rate.

That's because next fiscal year, local property tax collections could fall $1 billion short of what will be needed to maintain the status quo for K-12 public education. Local property taxes provide the lion's share of per-student funding to operate public schools in Florida.

That $1 billion loss for schools doesn't even factor in the nearly $6-billion hole in the state budget that lawmakers are anticipating for the current and coming fiscal years through June 2010.

"So the Legislature may have to face the question of raising property taxes, which I think we are quite hesitant to do," Policy and Steering Committee on Ways and Means Chairman JD Alexander said Monday. "But if we don't ... increase those taxes to keep that funding stream level, we'll have to make it up somewhere else."

The drop in property tax revenue is a product of plummeting property values. State analysts estimated in November that Florida was losing 6.3 percent in taxable property value, equivalent to $590 million. That figure is expected to get worse when the analysts reconvene in coming weeks.

Absent a solution, the tax revenue losses probably will cost the Hillsborough County School District about $200 million in fiscal year 2009-10, said Jim Hamilton, consultant to the district.

Neither party relishes the prospect of raising property taxes, which regularly is among Florida voters' top complaints.

Rep. Dean Cannon, one of the House's two budget chiefs, said the schools' budget draws from property and state sales tax receipts. Adjusting property taxes could be more painful than tweaking sales taxes, said Cannon, R-Winter Park.

The issue only makes it more critical for Florida to find more revenue sources, said Senate Finance and Tax Chairman Thad Altman, R-Melbourne. His committee is exploring a potential hike to the cigarette tax, possible repeals of sales tax exemptions and enforcing tax collections for online purchases.

Meanwhile, the federal stimulus package remains a wildcard. Florida may have to forfeit as much as $3.5 billion for schools, because it is one of several states that have reduced what they spend on education.

"I wish I could tell you that everything's wonderful," said Alexander, R-Lake Wales. "I do think we will get through this, and we will see another, brighter day. But make no mistakes: these are very serious budget issues that we have to deal with."

Reporter Catherine Dolinski can be reached at (850) 222-8382.