Competing Nashville budget proposal would increase funding for Metro schools, provide raises for employees – Tennessean
One of the Nashville city council’s leading voices on financial issues has offered glimpses into two of his own budget proposals as city leaders are set to debate in June next year’s budget and what could be the largest property tax increases in Music City history.
At-large council member Bob Mendes, the council’s budget committee chair, shared details of his substitute budget proposals this week: one that aligns closely with Mayor John Cooper’s budget for a 32% property tax increase but with different spending priorities and another that would raise the rate by 34%.
The latter option, he said in a blog post Wednesday, “does a lot more for those that need it most.”
The proposed $1.066 increase to the city’s overall property tax rate would provide funding for step increases and 1% cost-of-living adjustments for city employees and $7.6 million more for Nashville schools as well as $4.9 million to bring minimum wage for the school district to $15 an hour.
Cooper’s proposal calls for an increase of $1 per $100 of assessed value.
Mendes told The Tennessean he will present both budget documents next week, but won’t move approval on either until meetings in mid-June. There will be a public hearing for people to weigh in on the budget during the June 2 council meeting.
In a statement, Cooper spokesperson Chris Song said while the administration has only recently received preliminary details of Mendes’ proposals, they appear to maintain the “fundamental priorities” of Cooper’s budget plan.
“Mayor Cooper is grateful for Councilman Mendes’ expertise and leadership on the Budget & Finance Committee,” Song said. “To the extent there may be any appreciable policy differences, these can be worked through during the legislative process with the full Council’s considered input.”
Council members will have three other budgets to consider from council members Emily Benedict, Freddie O’Connell and Steve Glover. The proposals from O’Connell and Glover call for a smaller property tax increase, while Benedict’s calls for the largest hike.
Glover vowed he will submit his budget for consideration, but he told The Tennessean on Friday that he is still working to finalize details and has had to resubmit his proposal this week.
He did not disclose the exact amount of his proposed tax increase but previously said it would be about a 20% increase.
Benedict’s budget proposal calls for a property tax increase of about $1.16 to include restoring raises for school employees and boosting funding for Nashville General Hospital and some grant funding. Without sharing further details, she said Friday she will decide by June 12 if she will file her proposal. She noted Mendes’ increased option includes more funding for schools, including raising the minimum wage — a tenet of her budget.
Under O’Connell’s proposal, the city would use funding from the federal Municipal Liquidity Facility program to allow for a tax increase of only $0.37 per $100 of assessed value.
The federal program aims to buy up state and local bonds.
Metro Finance officials said to participate in the program, the city must make a certification regarding solvency and must certify that it is unable to secure adequate credit accommodations from other banking institutions. At this time, the city does not meet the terms, Deputy Finance Director Mary Jo Wiggins said. But O’Connell said he wants to continue the conversation about federal assistance.
What’s in Mendes’ budgets?
The council member, who has aggressively pushed for a tax increase, or what he called a “tax correction,” for two years, released key differences between Cooper’s budget and the two options he’s considering in a chart to his blog.
Under the $1 tax rate increase, Mendes looks to cut about $4 million from the general government to spend in other areas, including:
- Step increases for Metro employees.
- $387,500 more than Cooper’s budget for nonprofits and education initiatives, including $300,000 more for Metro Arts.
- $262,000 for the Planning Department to implement plans to enforce “SP” zoning.
- Restoration of $25 million funding each for the Black Chamber of Commerce, the Latin American Chamber of Commerce, the Nashville Area Hispanic Chamber of Commerce and the LGBT Chamber of Commerce.
- $25,000 more for Tennessee State University economic development grant.
The option, Mendes said, would acknowledge how important city employees are to keep government functioning, help with jobs and quality of life by supporting nonprofits and education initiatives, and the zoning is especially needed in gentrified neighborhoods.
The funding priorities Mendes outlined are included under his $1.066 tax rate increase. This second proposal also calls for:
- 1% cost-of-living adjustments for Metro employees.
- $7.6 million more for Nashville schools as well as $4.9 million to bring minimum wage for the school district to $15 an hour.
- $1 million more for Metro Arts.
- $500,000 more for the GRAD program, which helps those in community colleges.
- $500,000 more for summer youth employment called Opportunity Now.
- $112,500 more for the Nashville Public Education Foundation.
- $50,000 more for Small Business Incentive.
- $40,000 more for the Nashville Business Incubation Center.
- $85,000 for Juvenile Court clerk for remote IT.
- Elimination of funding for the Andrew Jackson Foundation and Sister Cities program.
Under the increased option, it would also require targeted savings of $4 million to the general government and $2.3 million to the school district.
“This option shows the interaction between the pain of a tax rate increase and the pain of cutting services,” Mendes wrote on his blog. “Instead of holding the rate increase arbitrarily to a nice round number, this option focuses on trying to get help to the people who need it the most.”
Revenue still moving target
Mendes has previously said he wants an update on revenue projections to the council. Any budget that passes, he said, will include a requirement for one by Aug. 15, before property tax bills go out in October.
Metro collected this month $37 million in sales tax revenue from March activity, compared with $40 million in March 2019. Officials issued the “Safer at Home” order on March 23, so the amount doesn’t represent the significant amount the city’s economy was shut down during the ongoing pandemic.
Metro Finance said it expects to collect taxes from April activity about June 20.
“There is not enough information at this point for the activity in April and May to make any adjustments to the projected revenue shortfall; as such, there is also no impact on the mayor’s budget proposal,” Wiggins said.
Also as part of the budget ordinance, Mendes wants to require the administration to provide the Metro Council with a written report by July 31 of the feasibility of selling the District Energy System and the feasibility of hiring a third-party parking enforcement vendor.
Former Mayor David Briley first proposed those two plans to help balance the current fiscal year’s budget. But Cooper halted them after he took office in September and instead used other revenue, including from Music City Center, to make up the difference.
Compare the plans
If you own a home appraised at $250,000 in Nashville’s Urban Services District, you pay about $1,968.75 a year in property taxes. Here’s how much more a homeowner could expect to pay a year under the different proposals, which are subject to change.
- Mayor John Cooper — $625 more a year.
- Council member Emily Benedict — $725 more a year.
- At-large council member Bob Mendes — $666.25 more a year, under his larger increase proposal.
- At-large council member Steve Glover — $393.75 more a year. Glover said he wants to propose about a 20% increase but did not disclose the exact amount.
- Council member Freddie O’Connell — $231.25 more a year.
Yihyun Jeong covers politics in Nashville for USA TODAY NETWORK – Tennessee. Reach her at yjeong@tennessean.com and follow her on Twitter @yihyun_jeong.
Published 4:20 PM EDT May 29, 2020
