Metro Councilman: Corporate Tax Break Plan Creates 'Shell Game' With Metro Schools Budget

Posted: 10:09 PM, May 02, 2018
Updated: 2018-05-04 02:04:58Z
Metro Councilman: TIF Creates 'Shell Game'

Metro Councilman Dave Rosenberg is shining a light on part of a controversial tax shuffle that some say gives big breaks to giant corporations, saying it creates a "shell game" at the expense of the Metro Schools budget.

NewsChannel 5 Investigates has previously reported on the tax break plan, called "Tax Increment Financing."  It allows the city to offer tax breaks to corporations who develop in portions of downtown Nashville that were deemed "slum areas" and "blighted" in the 1970s, even though shiny new buildings and developments abound in the areas today.

More NewsChannel 5 Investigates Stories On TIF

Rosenberg says some of those corporate tax deals made when Karl Dean was mayor are unfairly inflating the Metro Schools budget.

"They're giving a refund on property taxes that were never paid, using dollars that were never given," said Rosenberg. "It's a shell game."

Specifically, Rosenburg is talking about a $9 million entry in the Metro Schools budget for next year, listed as a "Property Tax Refund" -- the money that's given to corporations as part of the tax deals made years ago.

Rosenburg says schools can't budget for that money, because they never see any of it.

"That money is never actually intended to go to Metro Schools, it's intended to go to pay off incentive deals to corporations that were brought to Nashville," Rosenberg said.

The $9 million passed through the Metro Schools budget is larger than amounts Metro Schools budgeted for school bus monitors, psychological services or textbooks for next school year.

Rosenberg says since schools can't spend the $9 million, it just artificially inflates the Metro Schools budget.

"That has the effect of making the overall school budget appear bigger, and the average per pupil spending bigger," Rosenberg said. "That would be $100 on average per student that it appears we're spending, but we're actually not."

Two years ago, Metro Council did away with the practice that made the Metro Schools budget shoulder any future corporate tax deals, but deals made years ago still show up on Metro Schools budget this year.

Rosenberg says in a year when school dollars are stretched thin, with some teachers in tears over budget decisions, it's important for budgets to accurately reflect the money available to schools.

"It's really just a matter of sound accounting and transparency," Rosenberg said.

Those who support Tax Increment Financing say the tax deals are necessary to attract corporations to Nashville who can bring with them hundreds or even thousands of jobs.