NASHVILLE, Tenn. (WTVF) — Tennessee is not planning to increase the money appropriated to its property tax relief program, meaning so many who could benefit from it might not be able to access the support they were promised.
The comptroller informed the Senate Finance, Ways and Means Committee last week that the statewide reimbursement program lacks the funds needed to meet demand. The shortfall affects tens of thousands of seniors, people with disabilities, veterans and their families.
"While you might not see it as a crisis, we see it as a problem that seriously needs to be addressed," Sen. Bo Watson, R-Hixson, Chairman of Senate Finance, Ways and Means Committee said to the comptroller.
In Tennessee, low-income homeowners are eligible for tax relief the year they turn 65. The same program helps disabled homeowners. The income limit for elderly and disabled homeowners is $36,370. Property tax relief is also available to disabled veterans or their surviving spouses, a population that grew 14% last year. This group is not subject to an income limit.
The yearly budget for the next decade is roughly $41 million, but in the last two years, spending surpassed that, which forced the comptroller to dip into reserves. For 2025, the state needed $47.3 million, but the program was only funded $41.2 million.
The money for the program comes from the general fund, not something like a tax.
"The comptroller is basically using other savings to make up for the deficiencies to fund this program when we could clearly just ensure there's sufficient funding to keep it whole," said Committee Member Sen. Jeff Yarbro, D-Nashville.
In the past, I've talked to leaders about more relief for seniors.
Rob Mitchell, the Rutherford County Property Assessor, supports a property tax break for all seniors. He's pushing for this because property values and property taxes in Tennessee have grown dramatically in the last few years to the point of forcing some elderly, fixed-income citizens out of their homes.
Mitchell is disappointed that property tax relief funding is at risk at all.
"Tennessee tends to do less than many other states when we are a healthy vibrant state and could afford to do more, and we should," said Rob Mitchell.
If the General Assembly takes no action, the comptroller's office may have to prorate the program, possibly leading to a reduction in benefits as soon as next year. The program only has enough reserves to cover anticipated costs for one more year. The program will need an extra $10.3 million next year and $19 million by tax year 2027.
"We shouldn't just kick this can down the road to be dealt with by the next governor or future legislators when there is a clear problem staring us in the face," Sen. Yarbro said.
Each year more than 100,000 individuals receive benefits.
I want to know how this could impact you and your family. Email at hannah.mcdonald@newschannel5.com.
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