As tax season dawns, backlash to a nationwide surge in property-tax bills is spurring states to double down on proposals to diminish one of the main revenue sources for school districts.
And that could, in turn, force them to accelerate budget cuts, staff layoffs, and building closures.
Elected officials or activists in at least 10 states鈥�, , , , , , , , , and 鈥攈ave recently pitched eliminating property taxes for homeowners, either by law or constitutional amendment approved by voters. Some of those proposals also target property taxes for businesses.
Lawmakers in those states and at least six others鈥�, , , , , and 鈥攁re also debating ambitious proposals for smaller-scale or narrowly targeted property-tax relief.
Axing property taxes鈥攚hich pay for more than one-third of the nation鈥檚 entire annual investment in K-12 education鈥攚ould mark a significant departure from how local governments have raised revenue for centuries. States would either have to find other sources of revenue to help pay for schools and other local services, or endure the political backlash from letting those services wither.
The gambit is hardly a political slam dunk. Nebraska Gov. Jim Pillen lobbied hard in 2024 to replace property taxes for schools with other state-level funding sources; the contained far more modest cuts.
Smaller-scale reforms are much likelier to gain traction鈥攁nd they could still take a major chunk out of schools鈥� budgets.
In Indiana, where lawmakers have , school district leaders have begun pondering such moves as .
Cuts to public education have political costs of their own.
But, 鈥渨ithout taking actions that address the tax burdens that average homeowners are facing, you continue to run this risk that voters are going to throw up their hands and say, tax relief in any form is better than the status quo,鈥� said Andrew Kahrl, a professor of history at the University of Virginia who about the disproportionate burden of property taxes on Black and poor Americans.
Bills are surging, and states are griping
State and local governments across the United States , the most recent year for which federal data for the full year are available. The bulk of that money ends up flowing to school districts.
That sum represents an 8% increase over the 2023 figure, which itself was nearly 9% higher than 2022鈥攖he biggest year-over-year increases since at least 2009.
Growth in residential property value has . Commercial property values, meanwhile, 鈥攚hich means governments are feeling more pressure to maintain or raise tax rates for homeowners.
States also came out of the pandemic with , thanks to an increase in federal support and a .
As a result, many have since pursued aggressive efforts to lower residents鈥� tax burdens.
In Texas, Gov. Greg Abbott launched his reelection campaign last fall by making the elimination of its flagship issue. He wants lawmakers to make it happen in 2027.
Florida Gov. Ron DeSantis, meanwhile, has question about property taxes for homeowners, rather than forcing them to wade through a slew of dense policy proposals.
Property taxes are local, not state. So we鈥檇 need to do a constitutional amendment (requires 60% of voters to approve) to eliminate them (which I would support) or even to reform/lower them鈥�
— Ron DeSantis (@GovRonDeSantis)
We should put the boldest amendment on the ballot that has a chance of getting that鈥�
Eliminating property taxes is harder than it sounds
Zeroing out property-tax collections makes for snappy political messaging鈥攂ut the reality is much messier.
Other mechanisms for generating public revenue鈥攊ncluding sales and income taxes鈥攁ren鈥檛 substantial enough to make up for the loss of billions of dollars property owners pay in taxes each year. Sales taxes also disproportionately burden lower-income residents, who feel the pain of fees and surcharges more acutely than their wealthier peers.
鈥淓ven if a high-rate local sales tax were able to offset property taxes in a community dominated by retail establishments, for instance, it would be woefully inadequate to the task of replacing revenue in a bedroom community or in farm country,鈥� wrote Jared Walczak, a policy analyst for the nonpartisan Tax Foundation think tank, in a .
Slashing property taxes could also have unintended consequences. Researchers for Realtor.com estimated last year that eliminating property taxes in Florida 鈥攁nd potentially lay the groundwork for a housing market crash in the coming years.
Devoting state dollars to property-tax relief in Texas for teachers鈥� retirement plans. Recent estimates suggest the state is from fully funding those obligations.
And efforts to abandon property taxes also risk undermining elements of local control that can be valuable for school districts and their constituents, said Kim Rueben, a public finance economist and former director of the State and Local Finance Initiative at the Urban-Brookings Tax Policy Center.
鈥淵ou want people locally to feel invested in their schools, and to help make the decisions about what is valued and what is not,鈥� Rueben said.
Even allies of the politicians pushing for property-tax elimination aren鈥檛 as sanguine about its prospects. Dan Patrick, Texas鈥� Republican lieutenant governor, has to property taxes, as opposed to the outright elimination favored by the governor.
Meanwhile, Republican lawmakers in Florida鈥檚 legislature have , including some that leave school property taxes alone. It鈥檚 not clear which ones will make it to the governor鈥檚 desk鈥攊f any.
Voters may get fresh opportunities to weigh in
Some state pushes for rolling back property taxes are instead targeting voters directly.
Anti-tax activists in Nebraska are that would ask voters to approve a ban鈥攅nshrined in the state constitution鈥攐n taxing property, inheritance, and income.
Current and former state lawmakers in Oklahoma are that would phase out property-tax collections gradually over three years.
And in Ohio, a push from a citizens advocacy group to has drawn opposition from Democrats and Republicans alike, including GOP Gov. Mike DeWine, who signed a .
DeWine is warning that the measure鈥檚 passage could force lawmakers to impose a 20% sales tax to make up for the revenue losses. 鈥淚t would just be devastating to all kinds of local government, starting with schools, but also police and fire and children鈥檚 services,鈥� he said of the ballot measure, according to the .
There鈥檚 no guarantee voters will back these proposals. Voters have never approved a proposal to eliminate their state鈥檚 property taxes鈥攎ost recently, in 2024, 63% of voters in North Dakota .
鈥淲hile people might want lower taxes, I鈥檓 not sure they want lower taxes if it means if they have a fire, there鈥檚 going to be nobody to put that out,鈥� Rueben said.
States eye decades-old tax cut approaches
Present-day agita over property taxes has roots that go back decades.
In 1978, fed up with stagnant wages and surging bills, nearly 65% of California voters approved , ushering in a suite of tax-policy reforms that .
Annual property-tax assessment increases were capped at 2%; property tax rates were frozen at 1% of a tax district鈥檚 total assessed value; property values rolled back to valuations from earlier in the decade; and the threshold of voter support needed to enact local tax increases went up from half to two-thirds.
Several states are currently considering reforms that bear a striking resemblance.
North Dakota last year approved an for property-tax increases, and Wyoming .
Some Kansas lawmakers , along with a restoration of 2022 property tax levels. Iowa lawmakers are considering competing bills that cap annual property tax rate increases at or . And Oklahoma鈥檚 governor is .
The caps are 鈥渁 way for state lawmakers to take credit for bringing tax cuts into existence without having to make the hard decisions,鈥� like cutting school budgets, said Carl Davis, research director at the Institute on Taxation and Economic Policy, a left-leaning think tank.
Other states want to make it easier for the public to approve or veto property-tax increases.
Missouri last year that forces most counties to hold an election asking voters whether to limit or freeze property taxes. Six Missouri school districts were among the plaintiffs that , aiming to block the law on constitutional grounds.
While people might want lower taxes, I鈥檓 not sure they want lower taxes if it means if they have a fire, there鈥檚 going to be nobody to put that out.
A similar version of this approach has already begun playing out in Georgia. Lawmakers in 2024 approved capping homestead property-tax increases at 3%, but allowed school boards to exempt their districts. Exactly two-thirds of the state鈥檚 districts .
In response, state lawmakers are advancing a new version of the law that removes the exemption option.
Lawmakers in and are also pushing to require voters to approve property-tax increases above a certain threshold.
And New Hampshire鈥檚 Republican lawmakers want voters to weigh in every two years on .
Schools are now confronting new tax relief policies
Other states are finding even more creative ways to address discontent with property-tax bills鈥攁nd schools, in some cases, have paid the price.
Utah now . The state tax commission, with members appointed by the governor, can block districts from increasing taxes if it determines they didn鈥檛 follow the public disclosure laws.
Fourteen Utah school districts . The state tax commission 鈥攊n some cases citing infractions as small as printing agendas for two separate public meetings on a single sheet of paper.
Two districts submitted additional documentation that prompted the commission to . All told, the commission blocked school districts from more than $40 million in proposed revenue.
Meanwhile, a would remove references to property taxes from the state constitution. That would make it easier for lawmakers to eliminate property taxes at their discretion, without needing voters to sign off.
And in New York, the state is giving local governments the ability to .
Getting creative with property-tax reform isn鈥檛 necessarily a bad thing, Rueben said. She favors policies that target relief to the neediest people.
鈥淚f you have circuit breakers that relate breaks in property tax bills to people鈥檚 income, that鈥檚 a way to make sure you鈥檙e not going to end up forcing anybody out of their house because they can鈥檛 pay their bills,鈥� she said.
School funding inequities are likely to persist and even deepen
Even as the nation鈥檚 schools collectively derive a slight majority of their overall funding from the combination of state and federal sources, property taxes remain a foundational revenue source.
That鈥檚 in large part due to the U.S. Supreme Court鈥檚 1972 decision in the case of San Antonio v. Rodriguez. Justices voted 5-4 to reject an effort from public education advocates to enshrine a federal right to education, and decouple local property taxes from school funding.
In the decades since, public education advocates have instead pursued dozens of legal challenges to states鈥� systems for funding schools, arguing that they don鈥檛 do enough to make up for local funding inequities that stem from property-tax disparities.
Many of those so-called adequacy lawsuits have resulted in court orders for substantial reforms to education investments, most recently in New Hampshire and Pennsylvania. Seven such cases are underway right now, in , , , Kentucky, , , and .
But generally those cases are striving to establish a baseline level of adequate funding for schooling owed to every K-12 student in the state under its constitution.
The cases don鈥檛, Kahrl said, prevent wealthy people from clustering in communities with well-funded school systems, and reinforcing the vicious cycle that keeps some schools perpetually impoverished due to a lack of local property wealth.
Eliminating property taxes won鈥檛 break that cycle鈥攂ut neither will maintaining the status quo, Kahrl said.
鈥淲e need to actually find ways to counteract those forces and prevent the hoarding of tax dollars within certain locales and ensure that those can be more broadly distributed according to need,鈥� he said.
