December 26, 2006

Nashvillians Protected from Higher Property Tax Rates if City Freezes Seniors' Taxes

Interesting story in the Tuesday Tennessean regarding the possible impact on property taxes across Tennnessee if cities take advantage of a new state constitution amendment and freeze property taxes for senior citizens.

A penny saved by seniors on property taxes under a new constitutional amendment will be a penny that cities and counties have to earn elsewhere - in some cases by boosting the burden on other homeowners. Growth in many Middle Tennessee counties could offset the money lost through freezing property taxes for lower-income seniors, but not in Metro Nashville, local leaders say. Nashvillians who don't get the break from the amendment passed in November probably will pay higher property taxes, said Mayor Bill Purcell, who supports the measure.

Bottom line: If Nashville's Metro Council goes ahead and freezes taxes for seniors, it can't automatically raise property tax rates on the rest of the city to pay for it. County commissions in every other county in the state can raise property tax rates to "pay for" freezing seniors' property taxes. The passage of state constitutional Amendment 2 in November just may have created an even more attractive environment for pushing city charter amendments across the state to freeze property tax rates unless voters approve higher rates in a referendum.

See also: Fear and Loathing in Memphis, from November 10, and Nashville Property Tax Charter Amendment Impact Grows, from November 15.