‘2023 Property Taxpayer Protection Act’ to be Taken up by General Assembly this Week

A bill that would protect property taxpayers from bearing the brunt of new residential development across the state is set to be taken up in the General Assembly this week.

The “2023 Property Taxpayer Protection Act” will remedy a disparity between the ways in which cities and counties are able to fund the expansion of services brought on by the accelerated growth Tennessee is experiencing which was created by the 2006 County Powers Relief Act.

A failure to rectify the unfair practices created in 2006 by not passing the 2023 Property Taxpayer Protection Act is, by extension, a vote for counties to increase property taxes.

Tennessee has one of the lowest state tax collections per capita, ranking 41st according to Tax Foundation, and a business-friendly environment that is driving migration from other states at an unprecedented rate.

The state’s population grew by a million people, from 6.1 to 7.1 million from the time the 2006 County Powers Relief Act was passed and 2022, representing 16 percent growth. The Nashville metropolitan statistical area which includes all of Davidson County as well as 12 surrounding counties, with an increase of 881,000 accounted for nearly half the state’s population growth over the same period.

A recent report showed two Tennessee cities – Jackson in the West Grand Division and Morristown in the East Grand Division – made the list of the top 10 fastest-growing cities in America.

According to U.S. Census Bureau data, Tennessee ranked 7th in the top 10 states for numeric growth between July 1, 2021, and July 1, 2022, with 82,988 people moving into the state during the one-year period.

While the growth presents opportunities, it also comes with increased costs for infrastructure like schools, roads and emergency services. Like the user-based gas tax, Tennessee taxpayers want the growth to be funded in a responsible and fair manner that doesn’t raise taxes on seniors or working families who don’t benefit from the growth.

Due to the 2006 Act, cities were allowed the option to use impact fees to fund the needs caused by new development, but left counties with raising property taxes as the only option to pay for increased services. This, while counties are responsible for funding public education, which is generally the highest allocation out of county property taxes.

SB0820 by Senator Joey Hensley (R-Hohenwald) and companion HB1206 by Representation Scott Cepicky (R-Culleoka) would treat all local governments the same. Currently, only those cities that have authority via their charter and counties that were authorized by a pre-2006 private act can levy an impact fee or adequate facilities tax.

While the proposed legislation removes the ban on access to tools to address growth, it does not levy any fees or taxes or raise rates. If passed, the legislation merely removes the barriers for local governments to manage their growth.

In fact, the bill retains the high bar of a two-thirds vote at two regularly-scheduled meetings of the local governing body as well as the requirement for the local governing body to develop a capital improvement program before levying an impact fee or development tax.

The bill expands the use of the additional funds to not only provide new and expanded school facilities, but to include law enforcement, fire and emergency medical services to meet the needs of citizens as a result of population growth.

The bill also specifically prohibits local governments from enacting a real estate transfer tax and preserves any private acts already in place.

SB0820 is scheduled on the calendar of the Senate State and Local Government Committee meeting of Tuesday, February 28 at 10:30 a.m., but due to its placement as item 29 on the agenda and budget hearings, it likely will not be heard.

HB1206 has been placed on the calendar of the House Property and Planning Subcommittee, scheduled for Wednesday, March 1 at 10:30 a.m.

The amendment that makes the bill can be found here.

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Laura Baigert is a senior reporter with The Star News Network, where she covers stories for The Tennessee Star.
Photo “Scott Cepicky” by State Representative Scott Cepicky. Photo “Joey Hensley” by Joey Hensley. Background Photo “Property” by Daria Nepriakhina.


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One Thought to “‘2023 Property Taxpayer Protection Act’ to be Taken up by General Assembly this Week”

  1. Cannoneertwo

    Better make sure that someone didn’t slip a provision into Hensley’s bill for cops to legally drive drunk while also going armed…