Tennessee should cap local property taxes like most American states do

Property tax bills, tax rates, and assessed property values have been on a tear here in Tennessee.

People who have lived in their homes throughout their careers are seeing eye-popping property tax hikes that are putting a strain on their pocketbooks.

Rental properties have been forced to increase rents because of higher property taxes.  And the costs of owning and buying a home have risen a lot in part due to property tax hikes.

In recent years, cities and counties across Tennessee have raised property taxes by double-digit percentage points.

Within the last year alone, Rutherford County residents faced a 16% increase, Greene County raised taxes by 30%, and just outside of Chattanooga in Red Bank, residents were dealt a massive 52% property tax hike.  And don’t think for a moment that Nashville residents missed a bullet — they didn’t.  In 2020, property tax bills rose 34% in the state’s capital.  We could go on and on.

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As these examples show, this is a big problem in all parts of the state and is growing rapidly, from urban centers to small rural communities.  More and more Tennesseans are being priced out of their homes, no matter where they live.

Without any homeowner protection, local governments in our state can raise taxes with reckless abandon and little accountability to taxpayers. Tennessee is one of only five states that does not place a cap on property tax hikes, according to the Tax Foundation.

Some states limit the growth in property taxes residents pay year over year. Others require tax increases to be adopted by voters in a referendum election. In these states, taxpayers are protected. We here in Tennessee are not protected.

Housing is a fundamental need for all Americans, whether they rent or own their home.  Government should never work to make housing less affordable through exorbitant property tax hikes on its citizens.

Unabated property tax increases burden taxpayers on fixed incomes and strain their ability to stay in their homes. They make it more costly for Tennesseans to become homeowners.  And, because property taxes are passed on by landlords in the form of higher rent, they harm even those who don’t own homes.

When property taxes go up, everyone, without exception, suffers.  This is especially true for low- and middle-income families.

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In 45 other states, local governments have learned to live within their means and pay for essential services without going back to taxpayers for more money year after year.

Families must stick to a budget and often forego luxuries to make ends meet.

Our local governments can, too.  We shouldn’t balance excessive local government spending by unbalancing everyday residents’ budgets. It’s just not right.

It may come as no surprise that placing a cap on property tax hikes is extremely popular among voters.  A recent Beacon Poll found that 74% of voters support some type of state intervention on property taxes.  On Jan. 9, state legislators returned to Nashville to conduct the people’s business and voters expect them to make property tax relief a top priority.

Limiting the growth in property taxes will benefit every single Tennessee family.  And with prices of many goods and services at an all-time high, this relief couldn’t come a moment too soon.

Dr. Arthur Laffer is founder of Laffer Associates, an economic research and consulting firm, and a former economic advisor to President Ronald Reagan. Joe Scarlett is retired chairman of Tractor Supply Co. and vice chairman at the Beacon Center, Tennessee’s premier free market think tank. Justin Owen is president & CEO of the Beacon Center.

This article originally appeared on Nashville Tennessean: Property taxes: Tennessee should enact a cap to protect all residents