State Rundown 9/5: Property Tax Policy Continues to Make Headlines

Property tax bills are undeniably a concern for many low- and moderate-income households across the nation, and while lawmakers are expressing a desire to tackle this issue, many states are doing so in a way that includes broad-based cuts as opposed to targeted property tax relief. Nebraska and Colorado both passed property tax bills during special sessions that will provide general property tax relief. Meanwhile, state officials in Texas warned lawmakers interested in eliminating property taxes that any effort to do so would cost the state $81.5 billion in revenue. On the other end, some officials in Cook County, Illinois, are asking for the state to consider a targeted circuit breaker to help low- and moderate-income families with property tax affordability.

 

Major State Tax Proposals and Developments

• COLORADO lawmakers used their four-day special session to approve a property tax bill, which Gov. Jared Polis recently signed into law. The bill includes a modest property tax cut, and it’s part of a deal with outside groups who have agreed to remove their sponsored voter initiatives from the November ballot that call for deeper cuts. – MARCO GUZMAN
• Lawmakers in NEBRASKA settled on a much less ambitious property tax relief bill than Gov. Jim Pillen initially proposed. The bill will provide $185 million in property tax relief and cap local property tax collections to inflation. – DYLAN GRUNDMAN-O’NEILL
• The state of KENTUCKY has met the necessary fiscal conditions to trigger a personal income tax cut from 4 percent to 3.5 percent in tax year 2026. The legislature will have to approve the cut in their next session. – ELI BYERLY-DUKE
• The MICHIGAN Supreme Court dismissed a lawsuit seeking a permanent income tax reduction after excess revenue in 2022 triggered a rate reduction from 4.25 percent to 4.05 percent. The decision allows lower court rulings, finding that the income tax reduction is only temporary for one year, to stand. – MILES TRINIDAD

 

State Roundup

• Despite a projected $445 million budget shortfall, LOUISIANA’s state Treasurer is calling for legislators to eliminate the personal income tax which brings in $4.5 billion of revenue annually.
• LOUISIANA quietly settled a lawsuit with ConocoPhillips Corp. after the state sued the company for underpaying state taxes by $390 million from 2008 to 2011.
• Jackson County, MISSOURI, elected officials have rejected a proposal for a quarter cent sales tax ballot measure dedicated to funding the Kansas City Chiefs after a similar ballot initiative—for a larger sales tax that also would have funded the Royals—was rejected by voters.
• Lawmakers in TENNESSEE have threatened to cut the city of Memphis’ share of sales tax revenue—worth about $75 million at present—if the city advances ballot measures aiming to restrict gun ownership. The ballot initiatives would not have the force of law but would authorize the city to enact them if the state of Tennessee approves. At present, nearly all local regulation of firearms are preempted by Tennessee law.
• Some TEXAS lawmakers have expressed interest in ridding the state of property taxes–a move that would cost $81.5 billion according to state officials.
• WEST VIRGINIA Gov. Jim Justice has again said he will call for a special session to discuss an additional small personal income tax cut—this time a 5 percent reduction to current rates—and a small child and dependent care tax credit. Lawmakers remain skeptical and say the governor has presented few specifics, but Justice indicates he will announce a special session Monday.

 

What We’re Reading

• Cook County, Illinois, Board of Review Commissioner George Cardenas discusses circuit breakers as a policy to address housing affordability in the Chicago area in the Chicago Sun-Times.
• RouteFifty highlights the many states that have cut sales tax on groceries to address high grocery bills.
• Politico lays out how Richmond, California, will receive $550 million from the petrochemical company Chevron, the town’s largest employer. After years of dissatisfaction with the firms’ safety record and financial contributions, a local coalition placed a ballot measure to tax firms per barrel of oil produced. Before the ballot was finalized, the firm agreed to pay the city an amount less than the tax would have raised. The effort may serve as a model for other refinery communities.

 

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