Florida Gov. Ron DeSantis is setting the stage for reform by calling for the elimination of property taxes in his state. Meanwhile, the Republican governor is utilizing his DOGE initiative to investigate spending practices in specific cities and counties, with an eye toward their impact on property taxes. This is crucial because DeSantis has identified the direct cause of escalating property taxes: government spending. Too often the blame is placed on property valuations or the assessment process, but it is spending that drives taxation.
Policymakers in many other states are also addressing escalating property taxes as a result of growing taxpayer frustration. Increasingly, as in Florida, calls are being made to eliminate property taxes altogether. The present frustration over property taxes is spreading like a wild grass fire, and the environment is being compared to the property tax revolts that sparked reforms such as the infamous Proposition 13 in California.
Eliminating property taxes may be a noble solution, but tax policy should always be approached with prudence. Replacing property taxes with a new tax or raising an existing tax to a higher rate, or even shifting more responsibilities to the state budget, are not necessarily sound tax policies. The best approach to lower taxes is to limit local government spending.
Whatever form it takes, property tax reform is so difficult not only because property tax systems vary from state to state but because they are the primary source of revenue for local governments. Nevertheless, lawmakers can apply specific policy measures that will provide relief for taxpayers while still making ends meet. Applying a 2 percent annual limit on property tax increases would help slow the growth of spending. This should not be a controversial policy.
Iowa, where local governments will collect a combined $6.4 billion in property taxes this fiscal year, illustrates the potential impact of such a reform. Over the past two decades property tax collections in the state have increased by close to 110 percent, surpassing both inflation and population growth. In the most recent fiscal year, total property tax collections from school districts, cities with populations over 1,000 and counties grew by $240 million, or almost 4 percent. Within the past two years, property tax collections have increased by over 10 percent.
In Tennessee, the situation is similar. Dozens of local governments have raised property taxes, drastically outpacing reasonable cost-of-living adjustments. Nashville and Kingsport recently raised their property tax collections for fiscal 2026 by 26 percent and 24 percent, respectively, while Mount Juliet nearly tripled its tax rate. More and more Tennessee cities, counties and school districts are raising property taxes at alarming rates.
To provide relief for taxpayers, we must set firm limits on how fast local governments can grow their budgets. This will ensure that taxes do not outpace the ability of families and businesses to pay. Taxpayers must be protected from unchecked growth in local government spending.
In addition, this budget limit could be combined with a referendum trigger. In this scenario, local governments could raise taxes modestly to cover inflationary cost increases, but anything more than that would have to be approved by voters at the ballot box. This would force local governments to justify new spending and allow taxpayers a greater voice in the process.
Finally, it is crucial that a budget limit apply to the total collection of property taxes. While Texas had spending limits in place, as a result of exemptions and loopholes they were ineffective and did not truly provide property tax relief. This resulted in Republican Gov. Greg Abbott calling a special legislative session to address property tax reform. To be effective, a budget limit must avoid exemptions and loopholes.
This does not mean that other positive reforms to property tax systems, such as transparency measures, cannot be included, but recent reforms across the states demonstrate that spending must be limited for reform to truly work. Recent reforms in Nebraska and Iowa are just two examples of states that have reformed their property tax systems but still failed to provide tax relief because local governments continue to increase spending.
Aside from property taxes, both Iowa and Tennessee have enacted substantial pro-growth tax reforms in recent years, but they still share with other states the albatross of a high property tax burden. Reducing this burden will not only help homeowners and renters, but also businesses. A lower property tax burden incentivizes economic growth, and that benefits everyone in the community.
Justin Owen is the president and CEO of the Beacon Center of Tennessee. John Hendrickson is the policy director for the Iowans for Tax Relief Foundation.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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