Nashville property tax bills will begin going out to residents next week, even as city leaders and a conservative group head to court over a referendum proposal that wants to limit the Metro Council’s power and stop the recently increased property tax from taking effect.
If the petition moves forward, voters would weigh in on Dec. 15.
Why are public officials worried?
Residents could postpone paying their property tax bill to hear if the petition will make it to a ballot. If people don’t pay between December and February like usual, it would hurt the city’s cash flow and ability to pay for operations. This would leave the city with an unbalanced budget halfway through the year.
A few weeks ago Tennessee’s comptroller warned the city of a state takeover. He told the city to start saving in case they don’t win in court and the tax increase is canceled. The city has announced it will freeze hiring for some jobs and make other changes to save money.
Public officials say financial rating agencies could downgrade the city’s financial outlook and outstanding bonds, which would increase borrowing costs and limit the city from doing big transactions.
More than 20,000 Nashvillians signed the petition because they want tax relief among other things. But a vast majority of councilmembers supported the 34% property tax increase. They see it as a way to make the budget whole, after many crises. What would the fallout of this change mean for Nashville?
The city is already missing out on opportunities to refinance and save some money because of the uncertainty. That’s even before the referendum has been placed on the ballot.
And if voters approve this referendum, the city says the changes would be dramatic.
Trash pickup would be twice a month, rather than weekly, and there would no longer be recycling. The fire department would have to cut over 500 positions which would delay response times. One-third of the police force would be cut. And the public-school district would have larger classes, fewer social services and a decrease in college prep.
“It will negatively impact property values and drastically reduce city services for all Nashvillians,” Greater Nashville Realtors Board of Directors President Kristy Hairston said in a press release.
The referendum is also known as the ‘Nashville Taxpayer Protection Act’ and it goes further than canceling the tax increase. It would also limit the city’s ability to issue bonds. Public officials say that would make it hard to invest in neighborhood infrastructure without frequent, costly elections.
The city has been trying to strengthen its case of why this referendum shouldn’t even make it to voters.
It largely centers on various parts of the referendum not being legal by state and local law.
For example, the petition wants to limit council’s ability to set the tax rate. But the city is pointing to Tennessee’s constitution which gives that power only to legislative bodies.
The Davidson County Election Commission met last Friday to vote on if there should be a special election. What did they say?
During the meeting, the lawyer supporting the referendum was very clear that he wanted all five parts to be on the ballot.
But the election commission struggled with putting the entire petition in front of voters, since almost all the members already agreed some parts aren’t legal.
So, the commission is suing to get the court’s opinion on what should happen.