“The world is hard, right now.”
That was a throughline of Nashville Mayor Freddie O’Connell’s annual State of Metro address, acknowledging the challenges Nashvillians have faced over the last year and proposing a handful of changes to address them.
Delivered Wednesday at Nissan Stadium, the address offers an opportunity for Metro’s top elected leader to outline his budget priorities for the upcoming fiscal year. These include:
- a proposed half-cent reduction to the local grocery tax;
- a grant program for local business owners, and;
- a new affordable housing finance program.
The budget, which O’Connell told reporters will be aligned with the reality that “revenue in Nashville didn’t grow this year,” will be filed by Metro’s May 1 deadline.
From federal policies to affordability, a year of challenges
O’Connell’s speech began by thanking the various first responders and community organizations that assisted in the aftermath of Winter Storm Fern.
But the destructive January ice storm was just one of the hurdles faced in the city in the past year.
The mayor criticized the actions of the Trump administration, including the immigration raids that began in Nashville last spring, the “expansion of unconstitutional presidential power,” and the loss of federal funding for various local programs.
“Last year when we gathered for the State of Metro, most of us were feeling pretty good about the city but apprehensive about the world,” O’Connell said. “We were beginning to feel the first impacts of DOGE. When summer came, families disappeared from their routines. Not because school was out — but because they were made to feel unwelcome.”
While he touted Nashville as a city with “one of the best job markets in the country,” where “wages are rising faster than rent,” O’Connell acknowledged the affordability challenges faced by residents. A recent study, for example, found that the majority of Metro employees now live outside of Davidson County, with costs playing a role.
“No matter where you live in the United States right now, you hear one word: affordability,” O’Connell said. “We’re not immune to its pressures here in Nashville, and we can lead on creative solutions to improve it.”
In recent days, local groups like Stand Up Nashville and Nashville Organized for Action and Hope have released requests for the administration to introduce long-term solutions to the affordable housing crisis. SUN called for the city to issue bonds to finance the construction of affordable housing on city-owned land, and NOAH asked to see the Barnes Housing Trust Fund fully funded.
More budget requests from the community will soon be heard once the budget is released. The Metro Council will hold its annual budget public hearing on June 2. The requests often factor into changes put forth by councilmembers.
Proposed solutions
A key proposal from O’Connell is a partial reduction of the grocery tax.
This action is only newly possible after Tennessee’s General Assembly passed a bill this session permitting metropolitan governments to make the change. The legislature had approved local governments to reduce their grocery tax in years prior, but the language of the law was restricted to city and county governments. This year, Metro lobbied for metropolitan governments, like Nashville, to be included. The bill has not yet been signed by the governor.
O’Connell has proposed a half-cent reduction in the tax. He told reporters that total elimination was not possible this year, but the city would consider further reducing it in future budgets.
Nashvillians saw a half-cent sales tax increase last year after voters approved a massive transit overhaul. O’Connell said at the time — and again now — that the grocery tax reduction could help balance this out.
“We asked visitors and commuters to chip in the most to our transit improvement program,” O’Connell said. “Now we’re proposing to give the same amount — a half cent — back to our own residents buying groceries. This puts money back into local pockets.”
Still, the bulk of local grocery taxes go to the state, not the city. Local governments in Tennessee are permitted to tax groceries up to 2.75%, while the state charges an additional 4% tax. Lawmakers considered proposals to cut down the state’s grocery tax this session, but no bills made it across the finish line.
The mayor is also responding to the chorus of housing asks from community groups. He announced that the city would be putting the “largest amount ever” toward the Barnes Housing Trust Fund, although the exact dollar amount has not been disclosed.
He also announced a new a revolving loan pilot program that would “build the foundation needed to initiate a durable affordable housing bond,” which Stand Up Nashville has been asking for. O’Connell told reporters that details of the pilot were still under development.
The mayor also declared new support for business owners, including the establishment of a legacy business program to support “longtime, local business owners.” The program will be administered through the mayor’s Office of Economic and Community Development. That’s in addition to a new Workforce Advancement Grant program, which will provide eligible businesses with tuition or continuing education funding for employees.
Following the speech, O’Connell also told reporters that he “would like to serve another term.”
On Air - 90.3 WPLN-FM