FAQs about $0.50 rate correction
Please read this and the posts linked there first.These are some of the questions I am hearing about the proposed $0.50 property tax rate adjustment:
What is the proposal?Adjusting the rate by $0.50 now would allow Metro to fund:
The school system’s requested budget (FY19)
Employee cost of living increases (FY19, 20)
Replenish Metro’s rainy day “5% funds” (FY19)
Pay known, already existing new debt obligations (FY20, 21)
Make up for the one-time sales of real estate and parking meter enforcement to cover budget this year (FY20, 21)
Cover minimal 1.5% growth in expenses (FY20, 21)
Remember, inflation is running at 2.5% — so planning for 1.5% growth leaves no room for error
This rate adjustment would only cover basic existing government operations until the next property value reassessment in 2021. It would not leave any room for funding for additional police or firefighters, and would not leave any room to provide additional funding for important programs like affordable housing.
A $0.50 rate adjustment is the minimum necessary for Metro to honor basic obligations to our schools and employees. More information is here.
Why is a property tax rate correction necessary?
As I have said in other posts, the “Metro government botched the…resetting of property tax rates last year.” In 2017, the Metro Property Assessor's office ran its typically good property value reassessment process, but then Metro skipped making a simultaneous rate adjustment. This was out of step with historic practice in Metro and must be corrected. More info here.
Don't we need a referendum to raise property taxes?
No. Under the Charter, we would need a referendum to raise the total property tax rate above $4.69. The proposal is for $3.655, substantially less than that cap.
Why propose this now?
The Mayor proposed a budget on May 1, and the Metro Council must approve a budget before the end of June. The budget process is the only opportunity to correct the property tax rate. The $0.50 adjustment is being proposed now to allow enough time for consideration before the budget is passed next month.
Why don't we make corporations pay their fair share?
First, commercial properties pay approximately 62% of property taxes in Davidson County. Any rate adjustment will be paid primarily by businesses.Second, I am confident that the Metro Council is going to reassess how economic incentives are judged and awarded in Nashville. Most citizens believe that downtown has enough momentum to be self-sustaining and they would like to see more tax dollars spent in communities outside of downtown. Unfortunately, any reassessment and realignment like this won’t happen overnight or in a single year. This rate adjustment is necessary for Metro to honor its immediate obligations while we address any inequity in economic incentives, which will take longer.
Does this impact the current election for Mayor?
I certainly hope not. While everyone should be sure to vote and not take anything for granted, I assume David Briley will be elected to serve out the last year in Megan Barry's term. My sense is that the timing for suggesting a rate correction would be criticized by somebody no matter when the suggestion was made. Rather than trying to read the tea leaves on that, the timing is motivated to give the community as much time as possible to digest and analyze the situation before the Council votes on a budget in June.
I may supplement this list over time.