The city of Nashville is on a path to go broke next year. That’s the unmistakably dire message sent to the Metro Council and other city officials on Tuesday night by Tennessee Comptroller Justin Wilson.
And the comptroller demanded that Metro adjust its budget as soon as possible, warning that the state already could have snatched financial control if not for a grace period being given to the new mayor, new finance director and new Metro Council.
“It’s up to you, the Metro Council, to make the tough but necessary decisions to keep this city on track,” Wilson said, describing the city budget as “just about as tight as you can possibly get it.”
In Wilson’s extremely rare appearance at the council — unprecedented, he suggested — the comptroller played the role of school principal. He gave a firm lecture about the trouble Metro’s in, called its finances “a mess” and concluded the city is “cash poor” despite all the growth going on.
In a series of charts, Wilson showed how Metro has been spending more than it is bringing in, and burning through its reserves. By the end of the current fiscal year on June 30, 2020, he said, there won’t be enough to pay the bills.
In one of numerous analogies in his hourlong talk, Wilson compared the city to a dangerous flight.
“On a 3,000-mile flight, and the pilot says, ‘Well, I suspect we have enough gasoline to get us 3,002 miles’ … that’s how you’re operating,” he said.
Yet Wilson’s bottom line assessment is that Metro leaders are equipped to make the necessary improvements. He suggests that will happen through a combination of a tax increase and reduced spending.
This chart by the Tennessee comptroller shows how little cash Metro has on hand in three key funds.
If Metro doesn’t find a fix, he repeatedly warned about the pain of a state takeover, in which his agency would decide which bills to pay and which services to cut.
But the Metro Council’s budget chairman, Bob Mendes, says a takeover won’t happen.
“It took eight fiscal years to get here. It’ll take less than that to fix it,” Mendes said.
“Oh, yeah,” Wilson agreed.
Mendes told the council that a corrective plan is already in the works from Finance Director Kevin Crumbo, who will present details in December.
After the meeting, Mayor John Cooper issued a statement thanking the comptroller.
“We face short-term budget challenges as well as longer-term issues such as rising debt, unfunded retiree obligations, and dwindling fund balances. Reasonable reforms to our budgeting process, borrowing, and cash management will help Metro regain our footing,” Cooper wrote.
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