Published in partnership with In the Black.
Tennessee is one of only four states, along with Vermont, New Hampshire, and Kansas, without some form of local property tax cap. Local governments relish this freedom and abuse it annually. For example, in July 2026, Johnson City approved a 20 percent property tax increase to in part pay for a new $37 million aquatics center ($55 million with interest), even though the city had existing aquatics facilities. Johnson City is not unique. Each year, dozens of counties and cities impose exorbitant property tax increases to pay for frivolous expenses such as bike lanes, stadiums, and splash pads, without taxpayer input or demonstrated improvements in core government services.
During the 2026 legislative session, Tennessee lawmakers rallied around this issue and proposed SB2064/HB1873, which would have created a property tax cap set at two percent annually, plus inflation. The bill also included a provision allowing voters to approve increases above the cap via referendum. This bill would have provided relief and predictability for hardworking Tennesseans.
Unfortunately, after passing the House Cities and Counties Subcommittee, the bill faltered, largely due to opposition from local governments claiming such a cap would erode local control and leave them in financial ruin, unable to provide basic core government services. With 46 states having property tax limitations, this claim can easily be tested by examining existing research on property tax caps.
As research and examples from other states show, property tax caps do not cause financial ruin or compromise core government services. In fact, as intended, property tax caps prompt local governments to restrain spending, live within their means, and in some cases, create additional revenue streams.
Not all property tax caps are created equal. The three main types of property tax caps are levy caps, rate caps, and assessment caps, and each functions differently with varying levels of effectiveness. Research demonstrates that levy caps, a limit on revenue, are the most effective strategy for encouraging fiscal responsibility, especially when paired with a referendum on tax increases above the cap.
The bottom line is that Tennessee should join 46 other states, including all its southeastern peers, and adopt a property tax cap—specifically a levy tax cap—to protect Tennesseans from unexpectedly large property tax hikes. Tennessee should also include a referendum option for voters to approve large increases. This way, taxpayers have the final say on big tax hikes, which is about as “local control” as it gets.