Every February, Black History Month provides an opportunity for us to remember the past and confront how history continues to shape our future. One place where the legacy of the past is hiding in plain sight is the property tax system — a foundation of local government finance that is not as fair as it needs to be.
As lawmakers across the country debate property tax cuts, most proposals would worsen existing inequities and devastate public services. But there are tax-based solutions available that can advance racial and economic justice.
Property taxes are extremely important as the primary funding source for local governments, accounting for roughly three-fourths of local tax revenue. These dollars pay for public schools, roads, libraries and emergency services — the bedrock of daily life. Communities with weak or stagnant property tax bases often face crumbling roads, overcrowded classrooms and fewer public services.
However, Black homeowners pay about 10 to 13% more in property taxes than white homeowners in the same jurisdiction with comparable homes. That’s because homes in Black neighborhoods are more likely to be over-assessed for tax purposes while being undervalued by private appraisers. This costs the average Black family hundreds of dollars a year. These aren’t abstract numbers. They represent groceries not bought, savings not built and debts not paid, for lack of money in the family budget.
Home ownership remains one of the most important avenues for wealth-building in the United States, but it’s one from which Black families have been systematically excluded. Only about 45% of Black households own their homes, compared with roughly 74% of white households. Additionally, white households hold more than five times as much wealth as Black households.