NASHVILLE, Tenn. (WTVF) — As yet another petition hopes to undo Metro Nashville’s recent property tax increase, one study has resurfaced to show why this was necessary in the first place.
Jennifer Carlat is the chief policy officer with Nashville Area Chamber. One-half of the group responsible for commissioning the Elliott Davis study. A 48-page document comparing Metro’s financial situation to six other similar metropolitan cities. The hope was to offer clarity on how much was being spent over the last five years compared to how much revenue was collected.
When compared to cities like Jacksonville, Louisville, and Indianapolis, Nashville was just below the median in its expenses. As for revenue generated, Nashville was far behind. Carlat says the biggest reason is that while most cities routinely raised property and sales taxes, Nashville had not.
“The result is that the city did not have much of a fund balance. Money that can be used in cases of emergency,” Carlat said.
At the end of 2018, Metro had less than a month of what they would use on expenses saved. All six other cities on the list had at least two months put away. On an average of five years, Metro was only up to 1.63 months in the bank. In total, Nashville’s expenses have exceeded revenues for each of the fiscal years from 2010 to 2019.
“That’s a problem if you’re going to have stability in your city,” Carlat said.
The situation with Metro’s finances was dire enough that Carlat says the only way out was for a tax increase. It wasn’t the most popular choice among chamber members, but Carlat says most understood this was about supporting the same Metro services helping customers.
The group 4GoodGovernment and attorney Jim Roberts have mailed out petitions for the 2021 Nashville Taxpayer Protection Act requesting to roll back the tax increase to the 2019-2020 level. They contend that the city is trying to make up for irresponsible finances of the past, by imposing a tax hike they say is not feasible for property owners. The NTPA stipulates the property tax rate could only increase 3 percent a year without voter approval.
Carlat says for years Metro may have relied on new developments and the tax benefits that came back to the city as a result. She says the city has coasted on the growth, without much thought into what can be done to raise revenue. That said, she doesn’t agree that taking back this funding is the correct fix.
More than half of the city’s revenue comes from property tax and so far, 80 percent paid by Monday’s deadline. A 1.5 percent interest was tacked on for any late payments. If your letter was postmarked before Monday's deadline, you won't face the late fee.
Metro’s charter won’t allow for extensions, despite the winter weather delaying the mail. What Metro council elected to do instead is work with The Housing Fund. The non-profit has agreed to cover the interest for seven zip codes where people are most at risk of losing their homes: (37013, 37206, 37207, 37208, 37211, 37216, 37218)
If you’re eligible, they may even pay up to $1,000 of what you owe in property taxes.
For more information on The Housing Resiliency Fund, visit this link:
Metro invites anyone paying their property taxes late, to pay what they can until they can cover the remaining balance.
This is a developing story and Carlat says they will revisit the study’s findings to see if more recommendations are necessary.