Property taxes have become a hot-button issue for state policymakers faced with public frustration over rising home values, inflation and housing affordability.
In the post-pandemic years, lawmakers have repeatedly tried to cut or even eliminate property taxes, according to a new analysis from the Pew Charitable Trusts. But such initiatives can carry major fiscal risks, particularly for local governments that depend on property taxes as a stable and predictable source of revenue.
During years of record revenue growth and surpluses, Pew noted, some states used extra monies to pay for property tax relief. But as budgets have become more stressed, policymakers have limited ability to backfill local revenue lost to property tax cuts.
Several states that enacted property tax cuts in 2025 have left it up to local governments to make up the lost revenue, the analysis found.
Reducing property tax burdens may offer short-term relief to homeowners, Pew said. But without sustainable replacements or backfill mechanisms, such measures can put critical services at risk and threaten the financial stability of local governments.
Property taxes will change, Pew said. The question is how much those changes will affect the fiscal foundation of local governments.
See the accompanying gallery for a look at seven states' property tax reform efforts and the potential fallout from the measures they have enacted, according to Pew's analysis.
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