The Push to Kill the Property Tax: History, Heat, and Hard Math

Sarasota, Florida, USA - “End the property tax” has escaped the fringe and landed on real campaign stages. From statehouses to think-tank whiteboards, activists are packaging abolition as a way to rescue retirees from escalating bills and stop tax foreclosures. In 2025 the idea isn’t just talk: Ohio Republicans drafted a constitutional amendment to phase out local property taxes statewide; Florida’s House Speaker demanded a study of swapping property tax for higher sales taxes; and Texas leaders keep floating elimination frameworks after a record 2023 cut.

Why now?

Three tailwinds: reassessment spikes after the pandemic housing run-up; insurance and mortgage costs compounding homeowner pain; and a post-COVID office slump that is already shrinking commercial values—and with them, future tax bases—especially in big metros. State fiscal analysts and Moody’s have warned that commercial-property stress is a real risk to local revenues.

The oldest American tax

Property taxes predate the republic. Colonies levied them widely; by the 19th century they were a mainstay of state and local finance. Today they remain the single largest local tax in the U.S., accounting for roughly three-quarters of local tax revenue and about a third of total local general revenue (the slice varies by state). In practical terms: property tax is how we pay teachers, pave streets, keep libraries open, and secure most general-obligation bonds.

Schools are the big dependency

Nationally, local revenues—powered largely by property taxes—supply a large share of K-12 funding. That reliance is precisely why “abolish” collides with the realities of school finance formulas and bond covenants.

Abolition is not the same as relief

We’ve been here before. California’s Prop 13 (1978) didn’t abolish the tax; it capped assessments and rates, pushing more school funding to the state and permanently reshaping local autonomy. Colorado’s Gallagher Amendment (1982) held down residential assessments for decades and was repealed in 2020 after years of fiscal contortions. These are cautionary tales: even soft caps trigger big second-order effects. Abolition would be far more disruptive.

The 2025 abolition front, state by state

• Ohio. Senate GOP leaders unveiled a constitutional amendment to eliminate local property taxes, with the Ballot Board advancing multiple petition filings this year. Mechanics are still hazy: how quickly, who replaces the revenue, and how to handle existing school and local bonds.
• Florida. Legislative leaders and the Florida Policy Institute have both aired swap scenarios—ending or slashing property tax and making it up with a broader, higher sales tax. Analysts flag regressivity, tourism sensitivity, and the sheer scale of revenue to replace.
• Texas. After a $18 billion cut in 2023, elimination remains a marquee promise in conservative circles, typically via a long phase-out funded by consumption taxes and state surplus. Lawmakers have not agreed on the replacement map.
• North Dakota. Voters crushed a 2012 repeal attempt; a new petition drive aims for a 2026 ballot. The last effort failed largely because sponsors couldn’t credibly replace school and county budgets. That math hasn’t gotten easier.

The replacement problem (this is the whole ballgame)

Local governments don’t just “have” property taxes—they pledge them. Most general-obligation (GO) bonds are secured by an ad valorem tax on property. Eliminate the tax and you must defease, refinance, or constitutionally guarantee new revenue streams acceptable to bondholders and ratings agencies. Expect higher borrowing costs if the pledge weakens.‍

So what fills the hole? Common abolition blueprints combine:

1. Broader sales taxes. Politically straightforward, but regressive; rates must be very high to replace the property tax, and bases fluctuate with the economy. Tourism states can lean on visitors—until recessions hit.
2. State takeover of school funding. Shifts control upward. California’s post-Prop 13 drift is the example: local discretion shrank; state equalization fights grew.
3. Fees and special districts. Work for utilities and some services; not a general fund solution.
4. Land-value or split-rate taxes. Keep taxing land (hard to hide, discourages speculation) while cutting or eliminating tax on buildings. Pennsylvania cities have real-world experience; research suggests it can lower burdens for most homeowners while promoting development. It isn’t abolition—but it answers many complaints people have about the property tax.‍
5. Circuit breakers and homestead relief. Cap tax bills as a share of income for seniors and lower-income households; expand homestead exemptions; allow deferrals. These target pain without detonating the base.‍

Winners and losers (be honest about this)

• Winners under abolition: Asset-rich, income-poor homeowners (especially in high-tax metros); large landholders with modest sales activity—if the swap leans on sales taxes.
• Losers: Renters (landlords’ untaxed status doesn’t guarantee lower rent); local control advocates; bondholders if pledges weaken; retail-heavy local economies if sales tax rates jump.

And there’s timing. With office towers being reassessed down, some city leaders argue abolition now would lock in a smaller commercial contribution and shift more of the long-run load onto consumption—precisely as e-commerce keeps leaking sales out of local bases.

The politics: simple slogan, complicated fix

“Kill the property tax” polls well because the bill arrives even if your income doesn’t. But every successful modern reform of property taxation has either (a) softened the edges (caps, exemptions, circuit breakers), (b) moved the load to the state, or (c) changed what we tax (land vs. buildings)—not erased the revenue altogether. Abolition asks voters to accept a much bigger gamble: replacing the backbone of local finance with a mix of state aid and volatile taxes, while preserving school quality and local credit. That’s a very high bar—and it’s why the last outright repeal effort (North Dakota, 2012) failed 76–24.

What a credible path would require

If any state truly goes for abolition, the plan that survives courtrooms and rating agency models will likely include:

• A constitutional, irrevocable state pledge replacing local GO bond security;
• A multi-year phase-out with triggers tied to revenue performance;
• State-guaranteed school funding formulas with minimums per pupil;
• Targeted relief (circuit breakers/deferrals) during the transition;
• And a structural alternative, like a land-value component, to keep speculation in check while rewarding reinvestment.‍

Bottom line

Abolishing the property tax is politically potent and fiscally perilous. If the goal is to protect homeowners and fix fairness, states have tools right now—circuit breakers, homestead expansions, land-value shifts—that deliver relief without sawing off the revenue limb local government stands on. The math doesn’t care about slogans. It will have to add up in bond documents, school budgets, and real neighborhoods the day after the celebration.