“In the years following the COVID-19 pandemic, lawmakers have repeatedly pursued measures to cut property taxes—or even eliminate them,” according to a late February report by the Pew Charitable Trusts. “But such initiatives often bring new fiscal pressures. They can carry significant fiscal risks, particularly for local governments that depend on property taxes as a stable and predictable source of revenue.”

According to the report, statewide property tax cuts in 2025 in Indiana, Ohio, and Wyoming are already “straining local budgets.” For example, “Indiana passed sweeping legislation to give homeowners $1.2 billion in tax relief between 2026 and 2028 through an annual tax credit of up to $300 on property tax bills and caps on local income tax rates, among other provisions. 

The report states that the cost to local governments over the three-year period is an estimated $1.5 billion. The impact? “Many localities now face budget shortfalls and are enacting budget cuts in response. Fueled by such concerns, Accelerate Indiana Municipalities (AIM), which represents the state’s cities and towns, is pushing the Legislature to consider several changes to the law during its 2026 session.”

Even with budget shortfalls and program cuts in mind, other states continue to consider statewide property tax cuts. Florida’s governor Ron DeSantis had pushed to end property taxes in 2025, and the state now has a bipartisan committee studying the issue. 

The upcoming November election could lead to the addition of more states which will eliminate property taxes. According to Pew, “In Nebraska, a group is planning a petition to eliminate property, income, and inheritance taxes. Michigan, Ohio, and Tennessee are also seeing efforts to place property tax reform initiatives on the 2026 ballot.”

The report concludes that “This rise in activity underscores the difficult trade-offs facing state policymakers. Reducing property tax burdens may offer short-term relief to homeowners. But without sustainable replacements or backfill mechanisms, such measures can put some critical services at risk and threaten the financial stability of local governments. As state legislative sessions progress and potential ballot initiative efforts ramp up, the question is no longer whether property taxes will change, but how much those changes will impact the fiscal foundation of local governments.”

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