Tennessee House votes to amend property tax legislation amid affordability concerns

The Cities & Counties Subcommittee of the Tennessee State Legislature convened on March 19, 2025, to discuss House Bill 319, which aims to amend property tax assessments in the state. The meeting began with a motion to amend the bill, which was seconded and subsequently passed without objection.

The bill's sponsor emphasized its importance, stating it seeks to reaffirm existing state law and correct a misinterpretation by a Memphis judge regarding property tax assessments. The legislation is designed to prevent a potential $78 million property tax increase across Tennessee, which could adversely affect affordable housing. The sponsor argued that the current definitions of residential properties are vague, leading to misinterpretations that could impose higher taxes on homeowners and renters.

Several stakeholders provided testimony during the meeting. Bruce McNealage, a local residential rental operator, expressed concerns that the bill would ultimately lead to increased rents for tenants if property taxes rise. He highlighted the challenges of maintaining affordable housing amidst rising insurance and tax costs. McNealage argued that the bill would not protect renters but instead shift the tax burden onto them.

Another speaker, Jim Dooley, a former property assessor, supported the bill, asserting that single-family homes should not be assessed at commercial rates. He urged the committee to pass the bill to protect citizens from unfair tax assessments.

David Connors, representing the Tennessee County Services Association, raised concerns about the bill's potential impact on local government revenues. He noted that the amendment could lead to a reduction in tax revenue from properties currently assessed at commercial rates, necessitating local jurisdictions to raise tax rates to compensate for lost revenue.

The committee members engaged in discussions regarding the implications of the bill, questioning whether it would indeed prevent tax increases or inadvertently lead to higher taxes for other property owners. The meeting concluded with a recognition of the complexity of the issue and the need for further clarification on the fiscal impacts of the proposed changes.

Overall, the subcommittee's discussions highlighted the tension between maintaining affordable housing and ensuring fair property tax assessments, with significant implications for both renters and local governments across Tennessee. The next steps will involve further deliberation on the bill and its amendments as the committee seeks to balance these competing interests.