Catching up on the Budget: Why I Landed Where I Did

You may recall that where I left off at the beginning of the budget season was that we were facing a tax hike. Any tax increase is hard, but one on the heels of massive, across-the-board increases in inflation and the cost of living is particularly hard. I do not believe government costing more to run is a reason in and of itself to put an additional burden on anyone. We must also ask if that burden is right and narrowly tailored.

During the budget season, I went through every line item and department expenditure and revenue source with a fine toothed comb. Were there places where we could have trimmed around the margins? Absolutely. We will never eliminate all waste - whether in government, business, or our personal lives - but the key is whether that waste is enough to make a difference. In this instance, in order to make a meaningful difference in most people’s tax payments, we would have needed to cut no less than $93 million from the Mayor’s proposed budget.

Now, first, this $93 million was new spending. I think that is important for us to be honest about. But, second, this new spending fell mostly into one of three buckets:

1. Spending required in order to make sure our own reserves remained sufficient.

2. Spending required to fill holes in lost federal funds.

3. Spending required to keep salaries and expenditures steady in our inflationary environment.

With respect to reserves, I could not justify any cuts in the short term because short term cuts actually cost us more in the long term. How? Our bond rating, and thus our borrowing rate, is reflective of our reserves. If we were to cut them, it would increase our borrowing rate. A short-term savings in exchange for long-term interests costs, while also failing to set up sufficient reserves during potentially upcoming turbulent economic times just didn’t make sense to me.

With respect to filling federal holes, we were mostly talking about Metro Schools and Health funding. In particular, to save the amount of money necessary, we would have lost Promising Scholars. This program is a lifeline for so many families, and because it provides childcare when schools are closed, it saves them much more than the taxes will cost them. We would have been cutting important nursing positions and other health professional positions, all of which save us long-term health care costs. We would have likely been cutting into everyday services - things like snow plowing and pothole filling, which save us money in our everyday lives by saving our tires and making sure we get to work in snowy weather.

With respect to the third and final bucket, employee costs were already very narrowly tailored in a way that helped bring our salaries up to the market for similar government employees in competing cities while also holding staffing counts flat. Even without any salary adjustments, we would not have saved enough money to make a dent in taxes, and by adjusting salaries, we are setting our City up for better employee candidates and retention, all of which lead to better services.

The cost of living in Nashville is not just our taxes but the cost of everything we need and do every day. The cuts we would have made to lower our taxes would have ultimately increased our cost of living.

Now, I do want to add that I think there are longer term things we need to think about. First, I really don’t like how we are forced into a situation where employee counts are inflated by departments so that those departments have extra money for things like utilities and necessary repairs. We have to fix our budget line items so we have more transparency in this area. I also don’t love that some departments have council and mayoral oversight while some are completely independent. It means that we are funding departments that are not operating democratically or with oversight. I’ll have much more to say on this later. But, for now, know that I continue to work on these areas so we can have truer, clearer, and more democratic budgeting as we move forward.

Today’s Meeting and the Downtown Business Improvement District

By way of background, we have three “Business Improvement Districts” in Nashville: (1) Downtown, which levies a property assessment and a sales tax, (2) the Gulch, which levies a property assessment, and (3) South Nashville, which levies a property assessment. Generally speaking, each of these BIDs levies additional assessments, which appear on bills to be taxes (but aren’t technically taxes under state law) to fund infrastructure and maintenance costs within the BIDs. I generally like BIDs as I think they are a good way for unique areas to voluntarily levy funds for service needs that are above and beyond a City’s typical needs. In other words, it means folks downtown pay for downtown’s unique needs, not folks in, say, Bellevue or White’s Creek or Hermitage.

Before council tonight is a bill to combine the Gulch BID into the Downtown BID, making one centralized CBID. We’ve been working through this one over the past month, and we’ve touched on downtown security protocols and transportation quite a bit. In particular, I’ve worked closely to make sure the Downtown BID understands my concerns around its control over the Gulch multimodal infrastructure. I’ve been very pleasantly surprised that the Downtown BID has really dug into multimodal transportation downtown and is working with Walk Bike Nashville, NDOT, and the district council member much more closely now than before. The Downtown BID’s legwork and public support will be very helpful in getting some much needed quick build projects going this year.

Several other members have been working with the Downtown BID on security issues and governing issues. I really appreciate the Downtown BID’s willingness to support and engage in these conversations. I am supportive of the many amendments to the CBID legislation that my colleagues are bringing to address these issues.

You may be wondering why anyone who doesn’t own or rent property downtown should care whether downtown property owners want a business improvement district. The reason is because it will raise sales tax on all food and goods sold within the Gulch. In other words, this is not a district issue that a district can just say applies to those who live within it, but it is an issue for anyone who eats or shops within the Gulch.

On the whole, this is a very limited sales tax (0.5%) and (per state law) it goes directly to supporting maintenance and tourism downtown. The Gulch is a pretty pricey place to eat and shop, and this tax will likely be nominal for most folks spending money there. But the services that it pulls out of our general fund (and thus out of our countywide property tax rate) are significant. Because of these reasons, I support the combined CBID, even though this is a tax that will apply to anyone who spends money on goods or services in the Gulch, regardless of where they live or whether they consented specifically to this tax.

News Around Town & Helpful Links

Public calendar notices can be found here.

You can find the brush pickup schedule here.

Updates to the Housing & Infrastructure Study are available here.

For fastest repairs and attention, please submit all maintenance requests into Hub Nashville.

NES is working to replace old streetlights with new ones. Until that process is complete, please report streetlight outages here.

Side Notes

I am in the middle of The Siren’s Call. Next on my list is Small Things Like These. What are you reading and enjoying this summer, and are you using the Library’s Libby app?

A Final Note about Newsletters

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