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HB 2607

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 Bud Hulsey

HB 2607 limits Tennessee local property tax increases to 2% annually unless voters approve higher rates through referendum, restricting revenue growth for schools and local services.

Taken off notice for cal in s/c Cities & Counties Subcommittee of State & Local Government Committee
#realproperty #taxes
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Bill Summary · HB 2607

Legislative bill overview

HB 2607 caps annual property tax rate increases for Tennessee counties, municipalities, and other taxing entities at 2 percent above the previous year's total receipts, with limited exceptions. Jurisdictions seeking increases beyond this threshold would need voter approval through referendum.

Why is this important

Property tax caps directly affect local government funding for schools, infrastructure, emergency services, and other essential services. This bill could constrain revenue growth for municipalities facing inflation, population growth, or increased service demands, while also potentially limiting voters' say in local tax policy through the referendum requirement.

Potential points of contention

  • Revenue constraints for growing communities: Jurisdictions experiencing population growth or inflation may struggle to fund expanding service needs within the 2 percent cap without voter approval
  • Referendum burden and fairness: Requiring referendums for tax increases above 2 percent adds procedural complexity and may disadvantage less-organized communities or those with lower voter turnout
  • Definition of "exceptions": The bill's vague reference to "certain exceptions" creates uncertainty about which jurisdictions or circumstances can exceed the cap without referendum
  • Interaction with existing property value increases: Unclear whether the cap applies to assessments increasing property values separately from rate setting, potentially creating loopholes or unintended consequences

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

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