NASHVILLE, Tenn. (WTVF) — Mayor John Cooper filed his recommended budget for the 2021 fiscal year with Metro Council. The $2.447 billion budget includes raising the city's property tax by almost 32% to recover from the financial impact of the March tornado and the COVID-19 shutdown.
The Metro Finance Department estimates that the city will experience an estimated revenue decline of more than $470 million due to the tornado and pandemic.
The decline in revenue during Q4 of the 2020 fiscal year forced Metro to cut expenditures and spend down remaining fund balances, leaving Metro with only $12 million of fund balances.
“This is an unprecedented and difficult time for all Nashvillians,” said Mayor Cooper. “Thousands of residents have lost their jobs during the pandemic, and that makes the necessary decision to raise taxes all the more difficult. And as I mentioned during the State of Metro address, the city has thinned its cash reserves to a point where we find ourselves without a rainy-day fund during a stormy season. This is a crisis budget – not a discretionary budget – that will ensure Metro and Metro Nashville Public Schools can continue to meet our community’s needs.”
Cooper said the 32% property tax hike would bring the current rate of $3.155 up to $4.155, which is still the lowest property tax rate of all major Tennessee cities. A homeowner would pay an extra $750 a year for a $300,000 home. The last property tax increase in Metro Nashville was in 2012.
Over the past 25 years, Metro’s combined property tax rate has averaged $4.30. In the five years prior to the current historically low rate that began in FY2018, the combined rate averaged $4.545.
Mayor Cooper said a total of $234 million was saved in reductions, or spending deferrals and the tax increase is expected to restore $100 million in fund balances to make up for $216 million in net revenue losses, and fund $16 million in net operating needs for a “continuation of effort” budget.
“While this budget does not include the many new investments I had hoped to make in a full deployment of body cameras, affordable housing, transportation, social and emotional learning, and much more, this budget will provide needed financial stability to Metro Government,” said Mayor Cooper. “Nashville’s growth will return once again, our economy will flourish as it did before the storm, and we will not lose sight of the good work we’ve set out to do on behalf of all Nashvillians.”
No layoffs or pay cuts were included in the budget, but Metro employees will forgo pay raises or cost of living adjustments.
The budget now goes to Metro City Council for approval. Council Members have the option of approving it, amending it, or presenting a subsitute version of their own. An operating budget must be approved by June 30.
Last year, a substitute budget that featured a 15.8% property tax increase and would have covered cost of living increases for Metro employees and provided additional money for Metro Schools failed by one vote.
However, the budget does not have an easy road ahead. Some council members quickly responded, saying it is not what the city needs. Members of the Metro Minority Caucus release the following statements in a press release:
“If the mayor is open to substantive collaboration and changes, our 11 members look forward to working with him to get this right. If the administration thinks the budget is a ‘done deal,’ our message is ‘no way. In unprecedented times, we need unprecedented collaboration and creativity. Our caucus plans to be open minded, effective and outspoken on the budgeting process. In a challenging time like this, the mayor needs to collaborate with all the best talent around city budgeting and that hasn’t happened yet. I understand that all department heads have not had detailed meetings and the process has not been the ‘transparent’ one the mayor promised. The Metro Minority Caucus has reached out but has not been engaged." - Councilwoman Tanaka Vercher.
“The presentation lacked transparency and color. It was disappointing that not one person of color presented in the meeting. In addition, members of the Minority Caucus attempted to ask questions, but none were addressed. This budget process was done in the shadows and was not inclusive.” - Councilwoman Sharon Hurt
Brad Rayson, President of SEIU Local 205, issued the following statement in response to Mayor Cooper's budget:
“While we know it is an unprecedented and difficult year, for too many Metro employees, every year in Nashville has become a difficult year, no matter how the economy is doing. It is important for everyone to understand that before the crisis hit, our vital city services were already stretched thin. Most departments haven’t recovered from cuts made during the last recession. Our city has failed to match the growth we’ve experienced with the necessary investments in our schools and public services. The cost of living in Nashville has risen faster than workers salaries. Many of the people who keep the city running were struggling to afford to live in the city before Covid-19 hit. We appreciate Mayor Cooper’s work to find additional revenues in the budget and his decision to address the underlying structural revenue problem caused by the historically low property tax rate. We look forward to working with Metro Council to create a budget that works for everyone in this trying time.”