Property taxes essentially function as a form of land rent, a truth that cannot be ignored.
When Gov. Ron DeSantis asserts that property taxes prevent actual ownership of property, he is correct. This understanding is precisely why Florida’s early leaders introduced the original homestead exemption during the Great Depression.
Reforming the homestead exemption is one of three key tax reform priorities that should take precedence. Achieving this will require a constitutional amendment, which we can discuss further later.
The second priority is increasing local government accountability by eliminating service duplication and clarifying the distinction between general revenue taxes and service taxes. However, the third priority, which we will address here, is the most straightforward to pursue in the 2026 Session.
It doesn’t require a constitutional amendment and avoids the contentious issues surrounding local government. The first step in property tax reform must be the repeal of the statewide school tax, known as the Required Local Effort (RLE).
The RLE is an outdated remnant of 20th-century education bureaucracy and lacks relevance in today’s context of empowering students and parents. This nearly $11 billion tax is not subject to the second homestead benefit, is exempt from the 10% cap on non-homestead properties, and does not adhere to the rollback provisions.
Its dissimilarity to other tax lines raises questions about its legality.
According to Section 1(a), Article VII of the Florida Constitution, “… No state ad valorem taxes shall be levied upon real estate or tangible personal property …”
How, then, can the RLE be considered legal? While local school boards nominally “adopt” their RLE millage, they have little real influence; the state budget is set each year with a predetermined RLE amount, which the Department of Revenue allocates using a complex formula that results in a millage rate sent to districts for approval.
There are no substantial hearings or considerations for rollback rates — just a straightforward demand for payment.
This indeed resembles a “state ad valorem tax,” doesn’t it?
Long-time observers of Florida politics will remember when then-Speaker Marco Rubio sought to replace this tax with a sales tax swap during the Great Recession, when the state budget was $66 billion.
Now, 16 years later, with a state budget of $116 billion, we can eliminate this tax without getting bogged down in discussions of a sales tax increase; we can phase it out, as the commercial rent tax was reduced over the last decade. The initial step is to cap the RLE at $10 billion — an immediate reduction from the current amount — and ensure it never exceeds this cap. Then, we can cut it by $1 billion each year over the next ten years.
This line item constitutes 25% of total property tax collections statewide, and phasing it out does not require a constitutional amendment; it is an obvious solution. No other property tax reform can achieve such a significant impact with relatively low political costs.
As we approach the next Legislative Session, it is essential to proceed with caution.
Anyone who has undertaken a home renovation understands how quickly and satisfying the demolition phase can be, yet how challenging it is to complete renovations properly. Proposals such as a complete property tax repeal may seem appealing for improving affordability.
Still, those familiar with economics recognize that home prices would likely soar as demand for an asset with no carrying costs increases. We must be careful not to cause more harm than good. In my experience, simpler solutions are often the most effective.
Therefore, if the Legislature seeks to provide meaningful relief today, the most straightforward approach is to repeal the RLE.
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Matt Caldwell currently serves as the elected Lee County Property Appraiser and served in the Florida House of Representatives from 2010 to 2018.