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Bill

SB 2002

Taxes, Real Property - As introduced, limits the setting of the tax rate on property by a county, municipality, metropolitan government, or other taxing entity in any fiscal year at a rate that would render in total receipts from all levies an amount more than the receipts from that source from the immediately preceding fiscal year for the county, municipality, metropolitan government, or other taxing jurisdiction, plus an additional 2 percent, subject to certain exceptions; establishes a procedure by which the 2 percent increase may be exceeded by passage of a referendum. - Amends TCA Title 67, Chapter 5.

114th Regular Session (2025-2026) Introduced by Joey Hensley

Tennessee bill capping annual property tax revenue growth at prior year plus 2%, requiring referendum approval to exceed the limit.

Assigned to General Subcommittee of Senate State and Local Government Committee
#realproperty #taxes
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WeVote Research Nonpartisan
Bill Summary · SB 2002

Legislative bill overview

SB 2002 caps annual property tax rate increases for Tennessee counties, municipalities, and other taxing entities at the prior year's receipts plus 2 percent. The bill allows taxing jurisdictions to exceed this cap only through voter referendum approval.

Why is this important

Property tax revenue funds essential local services including schools, public safety, roads, and infrastructure. This bill directly constrains how much local governments can increase property tax revenue year-over-year, affecting both government budgets and taxpayer obligations. The 2 percent cap may limit governments' ability to respond to rising service costs, population growth, or infrastructure needs without voter approval.

Potential points of contention

  • Revenue constraints during inflation: A 2 percent cap may not keep pace with actual cost increases for public services, potentially forcing service reductions or deferred maintenance even when communities need expanded services
  • Referendum requirement burden: Requiring voter approval to exceed the cap creates procedural complexity and may disadvantage rural or less-mobilized communities that struggle to organize referenda
  • Equity across jurisdictions: Different communities have different fiscal pressures; a uniform cap may create disparate impacts on school funding, emergency services, or infrastructure quality depending on local economic conditions

Compiled from official sources — confirm details with the bill’s official record.

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