What Comes Up Must Go Down: Property Taxes and Tennessee’s Truth in Taxation Law
As we have witnessed with Nashville Mayor Cooper’s recent faux pas, a misunderstanding of the state’s Truth in Taxation law can at best create confusion among taxpayers, or at worst, be used to deceive them. Additionally, while the law does prevent Tennesseans from automatically paying higher property taxes, it has clearly provided little defense against property tax hikes. In essence, the law serves mostly as a transparency vehicle, requiring voter notification if a local government wishes to adopt a rate higher than the certified tax rate. However, a lack of understanding can create confusion around a law intended to better inform taxpayers. This is especially true as the law’s required method of notification to taxpayers, through a newspaper, becomes an increasingly outdated medium of communication. In order to better inform taxpayers and bring clarity to the Truth in Taxation law, Tennessee lawmakers follow Utah’s model by requiring notices to be mailed out to taxpayers.
Finally, Tennessee is in dire need of some form of additional protection for property owners. Without some form of modest limitation, Tennesseans will continue to be vulnerable to massive one-time tax increases. Without a property tax limitation, higher property taxes threaten to erode the state-level policies that have made Tennessee competitive and attractive for workers and businesses alike, such as our lack of a state income tax, the repeal of the Hall Income and death taxes, and our right-to-work status. As other states continue to make themselves more competitive, Tennessee cannot rest on its laurels if we want to continue to grow into an economic powerhouse. A property tax cap like those in 46 other states, when paired with our existing Truth in Taxation law, would ensure that all of our state’s policies are competitive and create the nation’s strongest economic environment.