Answering the call for property tax reform


February 14, 2020 12:34PM

Over the past year, Tennesseans from across the state have contacted Beacon more about one issue than any other. Despite being a generally low-tax state, many Tennesseans feel squeezed by their local governments. In 2019 alone, local governments proposed more than $200 million in property tax hikes. And as many of those who reached out to us said, what good is it if we have cut state taxes by more than half-a-billion dollars a year if local governments are going to take it right back out of our pockets?

Property taxes are among the most reviled of all. And when they are raised, it’s not as if the property owner has more cash to pay the extra bill. So, looking for help, Tennesseans began reaching out for answers. And Beacon’s research team got to work.

What they found is that 46 states have some form of limitation on the growth of property taxes. In most cases, large increases must be approved by the voters themselves. Beacon researchers designed a policy that would give cities and counties flexibility to keep up with inflation and the cost of providing services, while ensuring that voters had a say in significant tax increases. And at Beacon Impact, we turned that policy into legislation: HB2638/SB2751.

This legislation is simple and straightforward:

  • It allows local governments to raise property taxes by inflation plus 2% without voter approval. 
  • Any increase above that amount would require the local government to put the question to voters in a referendum, and a majority of voters must pass it to allow the tax increase to take effect.
  • To prevent against annual small increases to avoid triggering the referendum, cities and counties can “bank” their increase for a three-year period.

By giving voters some skin in the game when it comes to local property tax increases, we can join the other 46 states in ensuring that property taxes don’t run amuck, while still preserving the ability of local governments to provide essentially services. And we can take our “keep your hard-earned money” mantra that has made our state economy one of the strongest in the nation. 

If you are among those who want to keep your hard-earned money and have a say in local property tax hikes, send your legislator an email and tell them to support this important property tax reform. By making your voice heard, you can do your part to make the entire state of Tennessee a taxpayer-friendly place to live.