Tennessee has posted the nation's highest percentage increase in property taxes over the past six years, according to a new analysis published by the Beacon Center of Tennessee. The report, which examined data from a recent Wall Street Journal article on nationwide property tax trends, found that the Volunteer State stands alone as the only state with over a 75 percent increase during that period. Tennessee holds a double-digit lead over the next-closest state, Colorado, and contrasts sharply with Texas, which was the only state to record a decrease in property taxes.
The six-year dataset reveals that property taxes climbed nearly everywhere across the country, in both red and blue states, in states gaining population and those losing residents. Texas experienced a population boom larger than Tennessee's yet averaged a decrease in property taxes, while California and Louisiana both saw their populations decline as average property taxes increased. Across Tennessee specifically, numerous local governments passed major tax hikes in the last two years: 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 a 164 percent increase, reduced from an initial proposal of 400 percent. Nashville residents have witnessed property taxes rise by 60 percent over the last five years alone.
The report finds that despite 46 states and the District of Columbia having some form of property tax cap to guard against massive increases, Tennessee has yet to adopt this basic taxpayer protection. The analysis states that local governments in Tennessee have used their unrestrained ability to hike property taxes year after year, even as the state legislature has worked to maintain Tennessee's reputation as a low-tax state through measures like eliminating the income tax and cutting taxes for small businesses. According to the report, though most states saw increases in their average property taxes, many of those increases were more subtle, thanks in part to some form of property tax cap.
The Beacon Center's analysis attributes the severity of Tennessee's situation to the absence of statutory limits on local government taxing authority. The data demonstrates that local governments' drive to increase property taxes continues regardless of economic conditions or population trends, the report explains. While Tennessee boasts no income tax at the state level and enjoys a reputation for fiscal restraint, this picture changes once local taxation comes into focus. A property tax cap bill was introduced during the last legislative session but never made it to the floor for a vote, according to the report.
The report warns that without adopting taxpayer protections found in 46 other states, massive local property tax hikes will likely continue in Tennessee. The longer the state goes without a property tax cap, the analysis concludes, the more these local government tax increases will undercut Tennessee's reputation as a low-tax, fiscally responsible place to live, work, and raise a family. Tennessee residents deserve the same basic protections against runaway property tax increases that exist nearly everywhere else in the nation.