Update: New developments on Monday morning include key changes to two proposals. Please read the latest: Nashville Tax Battle Hardens As Influential Council Members Team Up Against Mayor
Nashville’s leaders have set themselves up for an epic budget showdown this week, with five different budget proposals up for debate at the Metro Council.
Of those competing budgets, three include some level of increase to the property tax.
As council members offer up their ideas, Nashville Mayor David Briley remains strictly opposed to raising taxes.
“While not perfect, my budget does all of this without raising taxes this year,” the mayor said in a statement on Friday. “I know there’s more work to do — but it’s a strong start and an indication of where we are headed.”
Budget Without Tax Hike
Briley’s $2.3 billion operating budget represents a 4.55% increase over last year, and would give Metro employees a 3% pay raise.
But it does not meet the full request of Metro Schools or the WeGo public transit agency, and it has drawn criticism for relying on the one-time sales of two assets: management of Nashville’s on-street parking and the District Energy System, which heats and cools more than 40 downtown buildings.
At issue in budget talks — for the second year a row — is whether Metro erred by not raising its property tax sooner. To some, allowing the property tax to reach an all-time low has meant that Metro has not benefitted as much as it could have from the city’s building boom and rising property values.
Nashville’s current rate is $3.155 per $100 of assessed value in its Urban Services District, a rate substantially lower than Tennessee’s other largest cities.
Competing Budget Proposals
At least two alternatives to the mayor’s budget proposal were expected — but five is a surprise.
They represent an array of differences, but in terms of the property tax rate, here’s the breakdown, identified by sponsor:
- No tax increase (mayor’s budget)
- No tax increase (Councilman Russ Pulley)
- 11.1-cent increase to generate $34 million (Councilman Steve Glover)
- 47.3-cent increase to generate $146 million (Councilwoman Tanaka Vercher)
- 52.5-cent increase to generate $162 million (Councilman Bob Mendes)
But it’s not just a matter of the tax rate. The proposals also suggest different ways for Metro to do its spending.
Most simply, the budget from Pulley closely matches the mayor’s. It makes shifts cuts with about $1 million to send some additional funds to Finance, Codes, Public Works, WeGo and some nonprofits.
Glover is proposing a tax increase of 3.5% almost exclusively so that Metro employees can get a pay raise of 6% instead of 3%. His plan includes more money for Metro’s low-income senior citizen tax assistance program.
Vercher is proposing a tax increase of 14.9% that would put several million dollars toward hiring full-time public safety staff: 30 in the Metro Nashville Police Department and 20 in the Nashville Fire Department. She would put more toward city debt. And her proposal would also increase funding for social and emotional leaning programs in Metro Schools, for Metro Codes, for WeGo’s AccessRide, and for expanded community center hours, among other changes.
The Mendes proposal would raise the tax by 16.6% to send more than $27 million to Metro Schools, as well as paying down more Metro debt, replenishing the city’s reserve fund with $53 million and accounting for inflation with $38 million. The plan also doesn’t rely on the one-time parking meter and District Energy System deals in the mayor’s budget.
In a weekend blog post, Mendes provided a comparison chart of the five budgets.
He shows many similarities between his and Vercher’s, but key differences. The Mendes proposal would send more to Metro Schools, put more in reserve, and anticipate inflation; Vercher’s has more emphasis on expanding operations for police, fire, Parks and Codes and would still sell the District Energy System.
As calculated by the mayor’s office based on the median home value of $265,000, the Vercher proposal would mean an increased annual tax payment of $313; the Mendes proposal would raise the bill by $348.
Metro must finalize its budget before July, so council members have been advised that if they reach an impasse this week, they’ll be called in for additional meetings later in the month.
Mayor’s Sharp Critiques
In a lengthy statement on Friday, Briley directly opposed the Vercher and Mendes plans, while not directly addressing the others.
Briley said the tax increases haven’t come from an “open public dialogue” and emphasizes how they were prepared by individual council members.
“I do not believe the public has had time to understand the impact of or the merits of the proposed increases being considered,” Briley wrote.
He goes on to call them short-term “Band-Aid” approaches, and he notes that property tax increases have a greater affect on seniors, low-income residents and “rapidly gentrifying neighborhoods.”
The mayor said he wants the Metro Council to reject a tax increase to give residents more time for a conversation.
Last year, a similar debate swirled around the property tax rate. It culiminated in a narrow defeat of a similar tax increase proposal from Mendes.