Property tax caps aren't helping

Property tax caps aren't helping

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Texas is the latest state to pass or amend legislation capping the amount cities’ revenue from property taxes can increase year to year. Bills like Texas’ SB2 are passed with the intent of limiting the amount homeowners have to pay in property tax and keeping them from getting priced out of their homes.

That stated goal is a noble one (on its face), but there’s another side to the equation, and that includes the increasing costs cities have to provide basic services and maintain aging infrastructure, fund education and support programs intended to cultivate growth and opportunities for residents and businesses.

In states where cities rely on property tax revenue as the primary funding source to cover these needs, the property tax caps limit cities’ ability to generate revenue to keep up with these liabilities, and it’s resulting in growing deficits, deferred infrastructure maintenance and cuts to basic services. Additionally, studies of early adopters such as California, Michigan and others have shown that these caps also impact social justice and wealth inequality as well.

In this episode, we discuss the fallout from this type of legislation in states across the country—and what cities can do in response.

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