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Proposed Charter Amendment Would Be Self-Inflicted Disaster For Nashville

9/14/2020
Chris Song

Would cause massive cuts to city services including layoffs to first responders

An array of Nashville leaders stands united to oppose Nashville from being gutted by an upcoming charter amendment proposed by an entity calling itself “4GoodGovernment.” The amendment would create a $332 million deficit for this fiscal year, threaten Metro’s credit rating, constrain the city’s ability to set property taxes to pay for services, and result in a suspension of capital projects. The proposed amendment would result in dramatic cuts to essential services such as emergency response, schools, trash collection, and road repair throughout Nashville.

Retroactive application will eliminate city services, reduce property values, and render schools “unrecognizable”

If passed, midway through the fiscal year, the amendment would retroactively reverse the property tax increase passed by 32 of 40 Council Members. The FY21 budget provided for a continuity of city services during the pandemic and began to restore Metro’s dangerously thin cash reserves. This proposed charter amendment comes at a time when Nashville’s financial position was already destabilized by a $216 million decline in sales tax and other activity taxes this fiscal year, in line with state forecasts. With this amendment, Nashville would be left unable to make up for the lost revenue.

The proposed amendment would immediately move the budget out of balance and create a $332 million shortfall for the current fiscal year. As a result, Metro would be compelled to take immediate corrective actions to comply with state law and the Metro Charter’s balanced budget requirement. Few parts of Metro Government, including emergency services and schools, could be spared significant reductions or eliminations, and nearly all capital projects would be required to be halted.

The proposal would immediately and directly hurt Nashville residents. “It will negatively impact property values and drastically reduce city services for all Nashvillians,” said Kristy Hairston, Board of Directors President for the Greater Nashville Realtors.

Dr. Adrienne Battle, Director of MNPS, is also alarmed by the proposal and said the resulting cuts would “render the school district unrecognizable to students and families.”

Neighborhood infrastructure and Nashville’s credit rating will be devastated

In addition to requiring a referendum for raising property taxes beyond two percent, the proposed amendment would also require a referendum for the issuance of bonds for projects exceeding $15 million, with vague exceptions for construction of “educational classrooms”, public libraries, public healthcare buildings, police and fire stations, and “Charter-protected facilities.” This aspect of the Charter amendment would cripple Nashville’s ability to make neighborhood infrastructure investments, such as building community centers, repairing roads, adding affordable housing, building new schools, and improving our park system, without a costly referendum.

Financial rating agencies would likely downgrade Metro’s financial outlook and outstanding bonds if the charter amendment is even placed on the ballot. This may result in increased borrowing costs and limit Metro’s ability to complete significant transactions and refinancing. A credit rating downgrade would make every city project more expensive for taxpayers.

Special election will cost $800,000, prompted by a tax levy that restores Nashville’s traditional low rates

The Davidson County Election Commission has verified that a sufficient number of signatures were collected to place the amendment on a special election ballot on December 5, 2020. According to the Election Commission, the special election will cost Nashville taxpayers approximately $800,000.

Even with this year’s increase, Nashville still has a lower property tax rate than Knoxville, Memphis, Chattanooga and other peer cities. Nashville’s current rate is in line with historic traditional levels; the tax rate of $4.22 remains below Nashville’s 25-year average of $4.30. Nevertheless, the proposed Charter amendment would require county-wide voter referendums for any property tax increase over two percent – a limitation that would prevent keeping pace with inflation and result in violations of state law during appraisal years.

Passage of the Charter amendment would result in massive cuts to city services

At mid-year, a $332 million spending reduction could affect 35-58% of the six-month remaining Metro Government operating budget. If a potential 35% cut were spread evenly across Metro operations, the following impacts could occur:

Public Works

Trash collection service reduced to twice monthly, with complete elimination of recycling collections.

Fire

  • 35% cuts to the NFD Operating Budget, resulting in cuts of approximately 557 positions, including 12 ambulances, 31 fire companies, and 17 fire inspectors.
  • Dramatic increases in response time delays.

Police

  • Reductions in force of one-third of MNPD officers (450-480 officers) through layoffs and a hiring freeze;
  • Closure of four of MNPD’s eight precincts due to officer shortages;
  • Dramatic increases in response time delays.

Other Departments

  • Partial to complete closure of parks, recreation centers, and libraries.
  • Severe reductions in services for the Hospital Authority, Metro Transit Authority, and the Sports Authority.
  • Significant delays and bottlenecks for permits, licenses, and inspections.

(Metro Government is undertaking further work to review potential impacts)

Effect on Metro Nashville Public Schools

At mid-year, a $332 million spending reduction could impact up to 25% or more of the six-month remaining MNPS operating budget. Budget cuts to every single school in the district would be required. MNPS would likely be compelled to significantly reduce education resources, including:

  • Increased class sizes;
  • Transportation service adjustments resulting in longer bus ride times;
  • Reductions in social work, counseling, community connections, and other services for families in need;
  • Reductions of supplemental services for students in robotics, career connections, college preparation, and other advanced academics;
  • Elimination of Social and Emotional learning (SEL) initiatives;
  • Reduced technical assistance and professional development for teachers and schools; and
  • Elimination of stipends for extra duties such as coaching and other extracurricular activities.

Reactions to proposed charter amendment

“This would cripple our city and gut essential city services. After two natural disasters this year, we don’t need a self-inflicted one. This would severely weaken Nashville at a time when we need to build Nashville stronger.”— Mayor John Cooper
“Cutting 25% of the MNPS budget would, unfortunately, render the school district unrecognizable to students and families. We owe our students an exemplary education, and it takes resources to hire the teachers and staff needed to serve students academically and socially emotionally.” — Dr. Adrienne Battle, Director of Metro Nashville Public Schools
“Greater Nashville Realtors remains committed to a vibrant and financially strong Nashville. Based on our independent study of Metro’s finances earlier this year, the city must make changes to become more financially stable, but this proposal is not the answer. This change would only harm the well-being of this city and its residents. It will negatively impact property values and drastically reduce city services for all Nashvillians.” — Kristy Hairston, Board of Directors President, Greater Nashville Realtors
“At first glance, the implications for the people of Nashville and Metro’s fiscal stability are significant and will alter the current positive trajectory of our city.” — Ralph Schulz, President and CEO, Nashville Area Chamber of Commerce
“The aftermath of the Nashville tornado and ensuing pandemic has created a time for our city to come together not pull apart. A property tax cap would be another disaster especially in the African-American community, but this time it would be self-inflicted. Nashville already has the lowest property tax of any other large city in our state so let us all pull together and give our city and ourselves the funding we desperately need to survive and thrive.” — Pastor Chris Jackson, President, Interdenominational Ministers Fellowship
“No council member was excited about raising property taxes, but the new tax rate is still below the 25-year average and below the rate in FY2017. 32 council members, including me, recognized the need to vote for an increase because we understood that the stability of Nashville depends on being able to pay our bills, so that we can continue to provide needed services to residents.” — Councilwoman Kyonzte Toombs, Budget and Finance Chair, District 2
“I voted against the property tax rate increase, but mandating a 2% cap is just as fiscally irresponsible as the rampant spending and poor fiscal policy that got us to this point in the first place. The city wouldn’t be able to provide basic services; essential services like public safety and schools would suffer. It would essentially cause a government shutdown which, believe me, no one wants. In the long term, a 2% cap wouldn’t even allow us to keep up with inflation. We absolutely need fiscal responsibility, but a 2% cap is just not practical or sustainable.” — Courtney Johnston, Metro Councilwoman, District 26
“Gutting city services, slashing schools and eliminating first responders during a pandemic is a terrible idea and would hurt working families in Nashville.” — Vonda McDaniel, President, Central Labor Council
“This proposal is just another dangerous far-right attempt to destroy the progress that we’ve made in Nashville. It would prevent Nashville from being able to pay our bills, invest in our schools, and maintain neighborhood infrastructure.” — Anthony Davis, former Councilman and owner of East Nashville Beer Works