At the state level, Tennessee boasts no income tax, has recently cut taxes for small businesses, and enjoys a reputation for fiscal restraint. But scratch the surface, and a different picture emerges. While the legislature has worked to keep Tennessee a low-tax state, local governments have used their unrestrained ability to hike property taxes year after year. A recent Wall Street Journal article on nationwide property tax trends showed Tennessee posted some of the highest percentage change in property taxes over the past six years. Despite 46 states and D.C. having some form of property tax cap to guard against massive increases, Tennessee has yet to adopt this basic taxpayer protection.
Though Tennessee is not the focus of the WSJ piece, pulling the dataset behind the article’s map reveals the severity of the situation. Tennessee has the highest percentage increase of any state, with a double-digit lead over the next-closest state, Colorado. The Volunteer State stands alone as the only state with over a 75 percent increase. Meanwhile, Texas leads the nation as the only state with a decrease in its property tax percentage change.
Six years of data show property taxes climbing nearly everywhere: in red and blue states, in states booming with new residents and ones losing them. For residents, this data shows local governments’ drive to increase property taxes, regardless of the situation. Texas has seen a population boom larger than Tennessee’s, yet the state averaged a decrease. In contrast, states like California and Louisiana saw their populations decrease, and average property taxes increase.
Though most states saw an increase in their average property taxes, many of those increases were more subtle, thanks in part to some form of property tax cap. Without one, many local governments in Tennessee have raised rates, putting financial pressure on residents. This isn’t just a Nashville problem, where residents have seen property taxes rise by 60 percent over the last five years. In the last two years, many local governments have passed major tax hikes: Red Bank at 14 percent (its third increase in five years), Johnson City and Erwin each at 20 percent, Bristol at 21 percent, and Fairview at 42 percent. Mt. Juliet officials approved an eye-watering 164 percent increase, down from a 400 percent proposal.
Tennessee residents deserve basic taxpayer protections found in 46 other states; otherwise, massive local property tax hikes will likely continue. Though a property tax cap bill was introduced last legislative session, it never made it to the floor for a vote. The longer Tennessee goes without a property tax cap, massive local government tax hikes will continue to undercut the state’s reputation as a low-tax, fiscally responsible place to live, work, and raise a family.