The nationwide voter revolt over property taxes is colliding with the reality that every other source of income has already been cut

National experts say it’s a property tax revolution, compared to previous backlashes, including the one this led to California Proposition 13a 1978 initiative to limit property tax rates and the extent to which local governments can increase property assessments on homes for tax purposes. As was the case then, rising home values ​​led to higher property tax bills.

“The trend across states is a relief for residential property owners,” said Manish Bhatt of the Tax Foundation, a Washington, D.C., group that studies taxes.

New proposals to cut taxes have been discussed in recent weeks in Iowa, Kansas, Michigan, Missouri, Oklahoma, South Dakota and Wisconsin. In some of these states, the debate is likely to continue for months.

While political pressure from angry homeowners is likely to keep some legislatures on track to lower property taxes, Efforts to eliminate property taxes In the primary residence the homeowner faces a tough road.

The judiciary may not be realistic

In Georgia on Tuesday, a state constitutional amendment, which would have cut property taxes on homeowners by 75% or more, failed when all but one Democrat voted against it. Because such amendments in Georgia require approval by two-thirds of lawmakers, the plan supported by Republican House Speaker John Burns requires at least 21 Democratic votes.

It’s possible to revive the Georgia bill, but House Republicans said they would also begin looking at more limited ways to provide estate tax relief that wouldn’t require a constitutional amendment.

In Florida, House lawmakers passed a proposed state constitutional amendment to phase out property taxes for non-school purposes over 10 years. The proposal, which would cost an estimated $13 billion in lost revenue, awaits action in the Senate. But one of the state’s key senators indicated his chamber was unlikely to agree, instead saying senators would prefer something less generous and more tailored to the needs of individual districts. Lawmakers said it could take a special session to reach an agreement.

Eliminating property taxes is “unlikely to happen,” said Thomas Brusi, a senior research associate at the Brookings Urban Tax Policy Center.

“Cutting it completely is really unrealistic, because it is the largest source of revenue for most local governments in the United States,” Brusi said.

Georgia backs away from full removal

Even the plan rejected Tuesday in Georgia was a step back from the original plan to phase out property taxes on homeowners by 2032. Tuesday’s version would have reduced, but not necessarily eliminated, property taxes on primary residence, while encouraging local governments and schools to rely instead on sales taxes to fund operations. It would also have been possible to increase taxes on data center sales of computers to offset some of the revenue losses.

House Ways and Means Committee Chairman Shaw Blackmun said the measure would have provided “significant savings to homeowners.”

“We’ve all received emails from voters who are concerned that higher property taxes will force them out of their homes,” he said in Tuesday’s debate.

But Democratic House Minority Leader Carolyn Houghley called the bill an election year “exercise in cold, hard politics.” She and other Democrats said that in many cases, local governments wouldn’t legally be able to raise sales taxes enough to make up for the billions in property taxes that would be lost.

“The math isn’t just math. It just doesn’t make sense,” Higley said. “This is not a responsible thing to do.”

Sales tax shifts

Other states are looking to switch from property taxes to sales taxes as well. South Dakota Gov. Larry Rhoden proposes allowing counties to levy a half-percent sales tax and allocate the proceeds to property tax breaks for homeowners. Last week, Rhoden, a Republican, launched a website that estimates how much money homeowners will save annually in property taxes, ranging from $428 to $1,227. However, it does not account for how much people would pay from increased sales taxes.

In Michigan, Republican House Speaker Matt Hall last week proposed raising taxes on currently untaxed services and using the money to erase the state’s share of property taxes, the state’s real estate transfer tax and Michigan’s personal property tax. No agreement may be reached before lawmakers finalize the state budget in the fall.

One problem with switching to sales taxes is that they may shift the tax burden from wealthier people to poorer people, said Brusi of the Urban Brookings Tax Policy Center.

“They’re trying to get to the next best thing or the next thing available, which is the sales tax, which itself is more regressive and tends to fall more heavily on low-income families than a property tax.”

Another problem with switching to sales taxes is that some local governments have few sources for retail sales tax.

“Not all locations have the same opportunities to replace that revenue,” said the Tax Foundation’s Bhatt. “This is often missed in discussions.”