12 for ’12 #6: Keeping Property Taxes Low
(NASHVILLE, TN) November 9, 2011 –State Senator Brian Kelsey (R-Germantown) today announced the introduction of a bill designed to slow the rate of growth of municipal and county property taxes. Senate Bill 2150 provides that no local government may impose an increase of more than one percent in the property tax rate without prior voter approval.
The legislation is the sixth in a series of announcements by Kelsey in his “12 for ’12” initiative for the next legislative session, which is set to reconvene January 10, 2012.
“This bill will help keep property taxes low,” said Senator Kelsey. “Residents deserve a voice in the decision to raise excessive taxes. Every increase in the property tax equals less money for families to buy groceries or pay off a credit card bill. Voters need a voice if politicians propose really excessive tax increases.”
Under the bill, property tax rate increases of one percent or less of the property value would continue to require only a simple majority of the local county commission or city council. However, property tax increases of more than one percent per year would require a referendum and approval from a majority of those voting in the referendum to take effect.
Voter approval of property taxes is not a new idea to Tennessee. In 2006, Nashville voters approved a ballot initiative to put all future property tax increases to a vote, regardless of the size of the increase. In the current fiscal year, approximately 50 percent of funding for the operating budget in Metro Nashville Davidson County comes from property taxes.
Other states have had property tax increase caps for years. California caps tax increases at 1 percent; New Jersey and New York limit annual increases to 2 percent; and Massachusetts maintains a 2.5 percent cap. In contrast to these rigid caps, Senate Bill 2150 conditions excessive property tax increases on voter approval.
Kelsey explained, “This bill will encourage greater fiscal responsibility on the part of local governments and will ultimately help cities and counties balance their budgets through saving and intelligent budget planning. If an emergency arises, local governments still have options under this bill, but raising the tax rate above 1 percent is not a decision that should not be taken lightly.”