October 2025: AESA State Examiner

Across America, statehouses are experiencing an unprecedented wave of property tax reform legislation as escalating home valuations collide with political pressure for taxpayer relief. What began as isolated complaints about rising assessment values has evolved into a coordinated, multi-state movement that threatens to fundamentally reshape how local governments—including school districts and ESAs—fund critical services.

Between 2021 and 2023, median property taxes nationwide rose by 10.4 percent, adding roughly $247 per month to homeowner expenses. States experiencing the sharpest increases include Wyoming (37.31 percent over five years), Kentucky (44.58 percent), and Ohio (46.23 percent). This dramatic appreciation in home values, combined with inflation-adjusted increases in tax rates, places mounting pressure on families, seniors, the disabled, and working-class homeowners alike.

Unlike previous property tax controversies that remained largely regional, today's reform movement spans red and blue states, urban and rural communities, and encompasses proposals ranging from incremental relief measures to complete elimination of the property tax system. Add in the instability of federal funding and the implications for K-12 schools and school districts is anxiety-inducing. For ESA executives and education advocates, these developments carry profound implications for organizational sustainability and the capacity of client school districts to deliver essential educational services.

The National Landscape

Property taxes represent the backbone of local government finance, generating approximately 70 percent of all local tax revenue nationally according to some sources and comprising 20.1 percent of total state-local own-source revenue.  The National Conference of State Legislatures reports that legislators in at least 23 states introduced bills in 2025 to cut or limit property taxes, while the National Association of State Budget Officers notes that governors nationwide have recommended "a wide range of tax policy changes aimed both at providing tax relief and generating additional revenue."

Recent surveys and ballot initiatives confirm widespread public support for change. Voters in 12 states confronted property tax measures during the 2024 election cycle, with seven states specifically addressing residential property tax issues. More are slated for November 2025.

State-by-State Legislative Activity

To follow are representative examples of the policy debate in a handful of states in the past two years.

Enacted Legislation (2024-2025)

• TEXAS: The Lone Star State enacted multiple property tax relief measures that will appear before voters in November 2025. Senate Bill 4 would raise the homestead exemption for school district taxes from $100,000 to $140,000 of assessed market value. Senate Bill 23 would increase the older adult homestead exemption from $110,000 to $160,000, potentially delivering combined annual savings exceeding $938 for homeowners age 65 and older. Additionally, the legislature approved business personal property exemptions for equipment valued below $125,000 and imposed stricter limits on revenue growth for cities and counties, lowering the voter-approval threshold from 3.5 percent to 1 percent annually.

 

• WYOMING: Lawmakers passed a sweeping 25 percent property tax cut for homes valued up to $1 million, enacted without replacement revenue mechanisms. The legislation also created a long-term homeowners exemption providing 50 percent assessed value reductions for residents age 65 and older who have paid Wyoming property taxes for 25-plus years. Senate File 69 established an additional 25 percent exemption on the first $1 million in primary residence value, requiring no application and applying automatically to qualifying properties.

 

• MONTANA: Following intense political debate, the legislature approved targeted, structural property tax reform featuring tiered rates based on home values. Primary residences and long-term rentals now benefit from preferential treatment compared to second homes and short-term rentals. Tax year 2025 rates start at 0.76 percent for the first $400,000 in market value, increase to 1.10 percent for values between $400,000 and $1.5 million, and rise to 2.20 percent for amounts exceeding $1.5 million. The state also provided one-time $400 rebates to eligible homeowners and expanded the elderly homeowner-renter credit by $250.

 

• COLORADO AND NORTH DAKOTA: Both states enacted substantial property tax relief packages. North Dakota doubled the primary residence property tax credit from $500 to $1,250 and expanded homestead exemptions, resulting in estimated costs exceeding $475 million over two years. Colorado voters approved Amendment G, expanding property tax exemptions for veterans whose disabilities render them unemployable, with state reimbursement to local governments for revenue losses estimated at $1.8 million annually.

 

• OHIO: The Ohio General Assembly overrode Governor DeWine's veto of property tax provisions in the state budget restricting local governments' authority to pursue certain types of levies including replacement, emergency, and substitute levies beginning January 2026. The override passed the House 61-28 and the Senate 21-11, marking a significant shift in property tax policy despite the Governor's concerns about transparency and local flexibility.

Pending and Proposed Legislation

Policy debates around property taxes continue in the current legislative sessions. Leading examples include the following below.

• PENNSYLVANIA: Senate Bill 929, a constitutional amendment, would prohibit school districts from collecting property taxes beginning July 1, 2029. The measure requires the General Assembly to identify alternative funding methods, proposing a 1.88 percent personal income tax increase and 2 percent sales and use tax increase as replacement revenue. Companion legislation (Senate Bill 962 and House Bill 1649) offers detailed implementation frameworks, though prospects for passage remain uncertain given concerns about fiscal stability and education funding adequacy.

 

• KANSAS: After failing to enact substantial relief in 2025, legislative leaders pledged renewed focus on property tax reform in upcoming sessions. Multiple proposals remain under consideration, including assessment valuation limits and revenue growth caps modeled on other states' experiences.

 

• GEORGIA: Amendment 1 proposes establishing a statewide exemption to local homestead taxes unless local governments opt out, coupled with assessment limits not exceeding inflation rates. Referendum A would increase the state homestead exemption from $7,500 to $20,000, affecting only local government collections and not state revenue.

 

• OHIO: Four property tax reform bills are advancing through the Ohio legislature with varying status.  HB 129 modifies the 20-mill floor calculation by including emergency and substitute levies; HB 186 establishes an inflation cap credit preventing school district tax increases from exceeding inflation; HB 309 expands county budget commission authority to reduce property tax levies deemed excessive after five years, targeting districts with fund balances over 30% of expenses; HB 355 caps inside millage increases at the inflation rate.  All four are currently in Senate committee.

 

Policy Challenges and Implementation Obstacles

Research from the Tax Foundation and other policy organizations identifies profound challenges in replacing property tax revenue. Property taxes currently comprise the most stable and predictable local revenue source. Alternative revenue sources present distinct drawbacks:

• Local Sales Taxes: Would require dramatically higher rates with wide geographic variation. Such disparities could incentivize cross-border shopping and business relocations, exacerbating rather than solving inequities.

 

• State-Level Replacement: Centralizing revenue collection and backfilling local losses creates distributional challenges and erodes local accountability. Once property tax assessments disappear, determining appropriate funding allocations becomes intensely political.

 

• Revenue Lock-In Effects: State replacement mechanisms typically freeze funding at current levels, potentially creating perverse incentives. Growing communities would receive fewer dollars per capita, while declining areas would see per-capita funding increase, potentially discouraging economic development and revitalization efforts.

The Bottom Line

Property tax reform represents a legitimate policy challenge requiring serious, sustained attention from ESA leaders and education advocates nationwide. Rising assessments have created real hardship for many families, and the political momentum for change appears unlikely to dissipate quickly.  The path forward, however, need not involve destabilizing local government finance or jeopardizing educational services. Circuit breaker programs, assessment reform to reduce volatility and bias, strategic state aid increases to support high-need communities, and transparency initiatives ensuring property tax decisions reflect voter preferences all offer promising alternatives to elimination or drastic caps.

ESA executives occupy critical positions in these debates. Your organizations bridge state policy and local implementation, possess deep expertise in cost-effective service delivery, and maintain credibility with both educators and policymakers. Use these assets to shape conversations, insist on responsible analysis, build coalitions for sustainable solutions, and protect the educational infrastructure that serves millions of students across America.