Nashville property tax increase fails by one vote; council adopts Mayor Briley's budget

Yihyun Jeong
The Tennessean

It came down to one vote.

The Metro Council narrowly rejected a proposal to increase property taxes, choosing instead to adopt Nashville Mayor David Briley's budget. 

The council voted 20-18 for a substitute operating budget proposal for the next fiscal year pushed by the council's Budget and Finance Chair Tanaka Vercher. Her plan would have increased Davidson County's property tax rate by 15.8%. 

The vote was just one vote short for approval. Council member DeCosta Hastings abstained. 

The plan, opposed by Briley, would have increased the tax rate by 49.8 cents to generate about $154 million in new revenue, enough to cover a cost-of-living pay increase promised last year to Metro employees and about $50 million more for the school district.

Tanaka Vercher speaks during the Nashville Metro Council meeting at the David Scobey Council Chamber Tuesday, June 18, 2019, in Nashville, Tenn.

Instead, the mayor's $2.33 billion spending plan was adopted, delivering a $28.2 million increase for the school district and a 3% pay increase for school employees. Though his plan does not rely on an increase in the tax rate, it relies on a successful private parking deal and the sale of Metro's District Energy System.

Briley watched the council meeting Tuesday night from his office downstairs of the council chambers. 

"Mayor Briley is pleased his recommended budget will become law, which funds a 3 percent cost-of-living-adjustment for all Metro employees and brings every full-time Metro employee on the general pay plan up to $15 an hour, a first in our city’s history," Briley spokesperson Thomas Mulgrew said in a statement.

"Mayor Briley is committed to continuing the conversation around our city’s budget priorities and revenue streams as we move forward through the fiscal year," Mulgrew said.

The council's actions directly challenged Briley's fiscal leadership. He stood staunchly opposed to a tax increase and openly criticized the council's proposals — calling Vercher's budget a "deviation" from her leadership in the past. 

The vote took place about three hours into the meeting, in which council members were left with the choice to either support a budget that anticipates a successful parking deal or raise property taxes.

This year's budget process was unprecedented by many measures. Historically, property tax adjustments initiate from Nashville mayors, not the council.

For the first time, the council considered four total budget proposals from council members — three that called for a tax hike. And in an unusual move that diverges from the norm, the council budget chair's proposed budget greatly differed from the mayor's spending plan.

This is the first time in Metro's history that the council failed to pass a substitute budget. 

Briley avoided having to decide whether to veto one of the budgets with a property tax increase. Though he didn't vow to do so, he strongly hinted a veto was a possibility Monday, saying he would do what's in the "best interest of the city."

Vercher called her budget one that "reflects the priorities" of the city and not one of "empty rhetoric." 

"This is a budget we can be proud of," she said, asking council members not to be afraid of a veto, but instead, go on the record to tell the residents that "they are a priority." 

Her budget would have included:

  • $50 million for Metro schools for 4% raises and step-increases.
  • 3% to a cost-of-living raise for Metro employees.
  • $6.1 million for WeGo Transit.
  • Funds nine firefighter and 20 police officer positions. 
  • $250,000 for waterways cleanup

Hastings said he could not support an increase because his constituents in District 2 already have the third largest increase in property value in the city. In the past year, he said he’s heard from senior citizens and renters that it was already getting too expensive to live in Nashville.

“Me increasing their taxes by 16% for only 1% increases for Metro schools … is crazy to me,” he said in an interview after the vote.

He would have voted for a property tax increase if it meant more increases for all Metro employees, not only for the school district. He added that Metro Council does not have authority of how Metro schools will spend its funds, despite Council member Anthony Davis mentioning that district budget chair Anna Shepherd assured them that the extra money would go toward raises.

In hindsight, Hastings said he should have voted against the substitute rather than abstaining.

“It was a last minute decision to abstain. I was not clear at the moment on what to do,” he said.

At-large Council member Bob Mendes, who forwent his and Davis' substitute budget Tuesday to join forces with Vercher, called for 52.5-cent property tax increase — a 16.6% hike — to generate about $162.8 million in new revenue.

Jim Shulman speaks to Bob Mendes during the Metro Council meeting at the David Scobey Council Chamber Tuesday, June 18, 2019, in Nashville, Tenn.

To avoid a steep increase, Council member Steve Glover proposed his own budget, offering a modest 3.5% property tax increase to give Metro employees a pay raise of 6% instead of 3%. 

His budget failed in a 34-3 vote 

Council member Russ Pulley, with the support from Council members Jeremy Elrod and Sheri Weiner, filed a budget closely matching the mayor's that shifted about $1 million in funds to nonprofits, Codes, Finance, Public Works and WeGo. 

Pulley withdrew his budget Tuesday night. 

What council members said 

For the most part, those who spoke on the floor Tuesday night stood in support of a tax increase, pleading the case to fellow council members to "do the right thing." 

“By putting it off yet another year, all we do is squeeze employees on pay and squeeze citizens on services,” said Mendes, whose push for an increase last year narrowly failed with a tie-breaker vote. 

"MNPS is chronically underfunded. Our teachers are underpaid. We need textbooks," Davis said. "You see the priorities they laid out for us. The bus drivers need a raise. There's just so much and we just can't get there without the revenue." 

Council member Colby Sledge, who last year warned of the "political realities" of the August election, said Briley's budget is less than a "status quo," citing how taxpayers will see drops in bus and library services as well extended community center hours. 

Council member Sheri Weiner, who cast the tie-breaking vote last year to reject an increase, was one of few that explained why she, again, would vote against the plan. 

This year's substitute, she said, was a "piecemeal" plan that would only "pay some more and not others." 

"We're going to increase the tax rate while not prioritizing all of those who work to keep us afloat," she said. "Are we going to tell them that we're just going to ask

for more money without wringing out every single inefficiency in our government?"

The Central Labor Council of Nashville and Middle Tennessee — which represents thousands of union members in the industrial, commercial, service, construction and public sectors — rescinded their endorsement of six council members Wednesday, that they said "lied to our members' faces about their intentions to support Nashville's working families." 

They called out Hastings, Jeremy Elrod, Mina Johnson, Nancy VanReece and Larry Hagar on social media. 

Elrod and Johnson said there simply wasn't enough time to relay the increase to their constituents before supporting the hike. 

"I would like no more than take care of my Metro employees," said Johnson, who last year voted for an increase. "(They) are the core of the government. I did say that last year. And I will say that again ... I do not have time to go back to my constituents and why I need to ask to raise your property taxes by 16%."

 Others, largely, sat silent during the meeting before they voted against the measure.  

No property tax increase since 2012

The current tax rate is $3.155 per $100 of assessed value in the Urban Services District. It's the lowest rate in the history of Metro government, coming under 1968's $5.30 rate.

The last property tax increase came when former Mayor Karl Dean pushed through a 53-cent jump in 2012. Because the city has raised taxes just once in the last decade, Nashville’s tax rate is among the lowest in Tennessee and in the nation compared with peer cities.

Supporters of an increase argued that it would address the city's core revenue problem and fulfill commitments to Metro employees and deliver desperately needed funding for schools.

Advocates, teachers, and community members protested budget cuts to bus services on the steps of city hall ahead of the meeting. They voiced concerns over how Briley's budget doesn't provide enough funding to cover a $8.7 million shortfall for WeGo, the city's transit agency. 

"During an economic boom, it is immoral to ask our teachers, firefighters, police officers, and other city employees to sacrifice their pay and benefits because of irresponsible financial decisions made by elected officials," said Brad Rayson, president of SEIU Local 205, the labor union that represents Metro employees and school district support staff. 

"The city deserves better and our children in underfunded schools deserve better. We will do our part in the next election to elect a Mayor and Council  who are going to support working families, not corporate special interests," he said in a statement.

The group made abundantly clear their disappointment with Tuesday night's vote as they exited council chambers, with one shouting "See you at the polls." 

Political challenges often keep local governments from raising the property tax, leaving the question of how to pay for rising costs looming large. It's especially difficult to find support during campaign seasons.

At-large Council member John Cooper, who is challenging Briley in the Aug. 1 mayoral race, said he voted against a property tax increase because he is “convinced that we can fund our real priorities with a strong and realistic management approach.”

Before looking to raise the tax rate, the city should look to have better management and find other additional revenue, like from the city’s tourism.

His stance is similar to retired Vanderbilt professor Carol Swain, who is also running for mayor. State Rep. John Ray Clemmons, who also is challenging Briley, supported a property tax increase.

“Last night, the people of Nashville lost,” Clemmons said in a statement Wednesday. “Passage of the mayor’s status quo budget effectively robbed the teachers, first responders, and working families across our county. “

How council members voted on Vercher's proposed tax increase:

Yes: Tanaka Vercher, Sharon Hurt, Brenda Haywood, Brett Withers, Burkley Allen, Ed Kindall, Fabian Bedne, Erica Gilmore, Anthony Davis, Doug Pardue, Mike Freeman, Freddie O'Connell, Dave Rosenberg ,Jacobia Dowell, Colby Sledge, Bob Mendes, Kathleen Murphy, Jason Potts, Delishia Porterfield and  Antoinette Lee 

No: John Cooper, Bill Pridemore, Steve Glover, Robert Swope, Jonathan Hall, Jeff Syracuse, Russ Pulley, Angie Henderson, Scott Davis, Holly Huezo, Jeremy Elrod, Larry Hagar, Kevin Rhoten, Mina Johnson, Mary Carolyn Roberts, Davette Blalock, Nancy VanReece and Sheri Weiner

Abstain: Decosta Hastings

Yihyun Jeong covers politics in Nashville for USA TODAY NETWORK - TENNESSEE. Reach her at yjeong@tennessean.com and follow her on Twitter @yihyun_jeong.