Property tax is a key source of revenue for over 90 percent of local governments across the country. Across all state and local governments, property tax generates about 37 percent of total tax revenue. Most municipal governments rely heavily on property taxes to fund essential services such as education, schools, police and fire departments, public works and recreation and infrastructure. As of March 2026, property tax revenue collected by state and local governments rose for the ninth consecutive quarter.
The National League of Cities City Fiscal Conditions 2025 (CFC) report shows the overall picture of how cities’ fiscal status fared in the past and in their most recent fiscal budget. Analysis on budget data from 213 cities for fiscal year 2025 shows a 3.4 percent increase in property tax collections. This growth largely reflects healthy housing market conditions post-COVID, not necessarily actions taken by local governments. Given this sustained growth, it is important to examine (using survey data from the most recent CFC report) how increases in property tax collections are contributing to local government fiscal health and enabling jurisdictions to mitigate reductions from other revenue sources.
The data collected from the CFC 2025 survey shows the increased property tax revenues which may or may not be due to actual increased rates. In total, 29 percent of the cities responded to the survey that they increased property tax collections in their municipalities (see Figure 1 below for more information). This trend is particularly noteworthy because, despite growth in property tax collections, cities overall anticipated a decline in total revenues, suggesting that rising property tax receipts helped offset reductions in other revenue sources rather than generating broad-based revenue growth.
Property Tax Responses by Population Category
CFC’s survey question asked whether a city was able to maintain, increase or decrease its property tax collection (regardless of the change in their property tax rates), and responses from the 260 cities were mixed. Nearly half of cities, 49 percent, reported that they maintained their property tax collections in FY 2025. Of this group, 24 percent of responses came from cities with populations under 10,000. Only 29 percent of cities indicated that they increased property tax collections within their municipalities.
At first glance, the projected 3.4 percent increase in property tax collections may seem inconsistent with survey findings showing that nearly half of cities maintained collections and only 29 percent increased them. Aggregate property tax collections are driven by the size of a jurisdiction tax base and the magnitude of changes in collections. Consequently, increases in larger or rapidly appreciating jurisdictions can produce overall revenue growth even when many cities report flat collections.
The Majority of Cities Have Maintained Their Property Tax Collection Status
Property Tax Collection Status, by Population Category
Source: National League of Cities City Fiscal Conditions Survey 2025 (N=227).
Figure Note: Percentages are calculated as the proportion of all total responses to the question. 14% of the full sample (N=227) responded N/A to this question and are not included in this figure. Population data is sourced from the U.S. 2020 Census. Property tax data is provided as an aggregated receipt which covers total property values and tax rates for residential, commercial and mixed use. “Maintained” means cities did not increase/decrease their property values compared to the previous year, or that the overall tax rate is stable.
Property Tax Responses by Region
As shown above in Figure 1, the majority of the cities across all city sizes reported maintaining their property tax levels in FY 2025. We can see similar variations by region. In Figure 2 below, our analysis finds that in the South, 61 percent of respondents reported maintaining property tax levels; 29 percent reported increasing property taxes; and 10 percent reported decreases.
In the Midwest, 50 percent of cities maintained property tax levels; 40 percent reported increases. In the West, 68 percent of respondents reported maintaining property tax levels, 22 percent reported increases and 10 percent reported decreases. In the Northeast/Mid Atlantic region, 59 percent of respondents reported increasing property tax levels, while 41 percent reported maintaining them.
No Cities in the Northeast/Mid-Atlantic Reported Decreases in Their Property Tax Collections in FY 2025
Property Tax Collection Status, by Region
Source: National League of Cities City Fiscal Conditions Survey 2025 (N=227).
Figure Note: Percentages are calculated as the proportion of all total responses to the question. Population data is sourced from the U.S. 2020 Census. Property tax data is provided as an aggregated receipt which covers total property values and tax rates for residential, commercial and mixed use. “Maintained” means cities did not increase/decrease their property values compared to the previous year, or that the overall tax rate is stable.
Key Takeaways
- Property taxes remain a foundational revenue source for local governments nationwide. According to the U.S. Bureau Quarterly Summary of State & Local Tax Revenue, local governments generate nearly twice as much revenue from property taxes as state governments do from income taxes, supporting essential services such as public safety, infrastructure, education and community development.
- Most cities are prioritizing stability over increases: Findings from the City Fiscal Conditions 2025 (CFC) survey show that nearly half of the cities responded that they maintained property tax collections in FY 2025, particularly among small and mid‑sized municipalities.
- National property tax revenues continue to grow, as reflected in U.S. Census Bureau data showing sustained increases across recent quarters for states and cities combined.
- Property Tax Decisions Across All City Sizes: Across all the population categories, most cities reported maintaining their property tax collections, indicating a cautious approach driven by affordability concerns and limited fiscal flexibility.
Taken together, these findings highlight that while property tax revenues are growing nationally, cities are working to balance revenues needed for programmatic and service provision with the impact on taxpayers. The CFC survey offers valuable ground‑level insight into how municipalities across regions and population sizes are managing property taxes amid changing economic conditions. Continued monitoring of these trends will be essential as local governments plan for future fiscal years.
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City Fiscal Conditions 2025
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