The Mayor's Budget — And How the Chair's Substitute Tweaks It

The Mayor's budget reflects a difficult municipal economy. Revenues into the city’s general fund are flat. Federal COVID relief funding has ended, and federal support is in question. Against that backdrop, the Mayor asked Metro departments to tighten their belts and looked at how to ease affordability for people.

The headline item in the Mayor's budget is a proposal to reduce the local option sales tax on groceries by a half-cent, from 2.25% to 1.75% (excluding the local option transit tax). That costs the city $9.2 million in revenue. More on whether I agree in a moment.

Beyond the grocery tax, the Mayor's budget invests $69 million into the Unified Housing Strategy, provides the recommended cost of living adjustment and the Office of Emergency Management a 16% funding increase to fund more warning sirens and emergency preparedness positions.

The Budget Chair builds on this by redirecting reserves to fund an additional $8.6 million in Council-prioritized projects: more funding for eviction right-to-counsel; keeping the Rodeway Inn operating for people experiencing homelessness; $1 million more for the Barnes Housing Fund; support for the Nashville Children's Alliance, CASA, the Mary Parrish Center, the Sexual Assault Center; a General Sessions social worker; an Antioch health study; childcare assistance; and partial funding for a much-needed library shuttle (with the downtown garage still closed).

There is a lot in both the Mayor's budget and the Chair's substitute that I support.

But both documents are built on a foundation that keeps the grocery tax cut in place. That $9.2 million is the crux of my amendment.

Should We Cut 0.5% of the Grocery Sales Tax?

The grocery tax reduction in the Mayor's budget costs the City $9.2 million in revenue. I understand the impulse as affordability is a genuine crisis in Nashville, and anything that puts money back in people's pockets feels like the right thing to do. But I've been thinking hard about whether this grocery tax cut is actually the most effective use of those dollars. I don’t think it is.

I have three primary concerns with the proposed grocery tax cut:

1. It doesn’t address what actually makes Nashville unaffordable.

   $9.2 million in foregone revenue, spread across an entire city, saves the average family of four about $72 a year, or about $6 a month. That's not nothing. But it's also not the thing that is making Nashville unaffordable. The things making Nashville unaffordable are housing, childcare, and transportation. Unlike $6 in everyone’s pocket regardless of their need, millions of dollars directed toward real, structural investment in housing supply and childcare availability can move the needle in ways that $6 a month simply cannot.

   As a starting point, keeping the revenue means MNPS can definitely continue expanding pre-k seats at Hillwood. For families who are able to get those spots, that saves them roughly $1000 a month in childcare expenses, and gives them peace of mind to go to work and contribute to their family’s budget. We need more of this type of relief across town, not less.

   More broadly, keeping this revenue means we can put millions toward lowering the cost of housing. Those dollars don’t just benefit the families who need housing built through the Barnes Fund. As explained in Nashville’s own Unified Housing Strategy, our housing shortage creates a cascading effect across the entire market: when the availability of homes fails to keep pace with population growth, higher-income households end up buying moderately priced homes. They renovate and upgrade them, making those homes even less affordable. That pushes middle-income buyers toward lower-priced homes, which in turn squeezes lower-income households out of options entirely.

   In other words, affordable housing investment isn't just for low-income Nashvillians: It relieves pressure across the entire market. When we add more units at the bottom, we directly take pressure off the middle. When we don't, everyone competes for the same shrinking supply, and everyone pays more.

   The Unified Housing Strategy and our childcare studies are unambiguous about what level of investment is needed to make a difference. The Unified Housing Strategy estimates that meeting Nashville's projected affordable housing needs over the next ten years would require approximately $80 million annually in local funding. My amendment doesn't get us there alone, but a grocery tax cut doesn't get us there at all. The families most burdened by the cost of living in Nashville aren't primarily being squeezed just at the checkout line. They're being squeezed by rent that has outpaced their incomes for years, by a housing market where home values have surged more than 40% since 2019 while wages grew only 19%, and by childcare costs that now exceed the cost of college tuition. Six dollars a month doesn't change that math. What changes that math is building more units, making more investments in our families, and increasing our tools to make housing and childcare financially viable.

2. It runs counter to what voters told us in 2024. I am a big believer in democracy, even though that isn’t always easy these days. The primary foundation of democracy is that we honor free and fair elections. In November 2024, Nashvillians voted overwhelmingly, by nearly a two-to-one margin, to raise their own sales tax by a half-cent to fund the Choose How You Move transit plan. More than 280,000 Davidson County residents weighed in and said yes to that level of taxation.

   Think about what that tells us. Nashvillians, given a clear choice, were willing to pay $6 or $7 a month out of pocket for an investment they believed would make this City more livable and more affordable in the long run. They understood that the biggest affordability challenges we face aren't solved by small monthly savings. They're solved by structural investments.

3. We can make an actual, more meaningful and thoughtful difference in the cost of living if we wait until a reappraisal year. There's a final reason I am pushing back on the timing of this cut, and it's a practical one. Historically, Nashville addresses tax relief in reappraisal years. When we reappraise, property values are reset countywide, and state law requires us to adjust the tax rate downward so that we don't collect more money than before. We then historically adjust the rate back up to cover inflationary pressures and growing needs. That's the moment to have a holistic conversation about the full tax picture, because we can see clearly what relief people are actually getting and where the remaining pressure points are. We would know at that point where housing values and property tax rates stand and how adjustments to one or the other affect families. We could then look at how to save all families the full cost of their grocery tax bill, i.e., an average of $27 a month, in the broader context of all that they pay.

My Amendment, and Why It Matters

I’ve filed an amendment to the Chair’s budget to restore this funding and direct it to the things that are actually making Nashville unaffordable. Specifically, my amendment does the following:

• It adds $6,555,000 to the Barnes Affordable Housing Trust Fund, bringing the total from $23 million to $29,555,000. That is a meaningful, structural investment in the thing that is actually driving Nashville's affordability crisis. It also gets us meaningfully closer to the Unified Housing Strategy’s goal of $80 million annually towards housing. While this sounds like (and is!) a lot of money towards housing, it is still well below what peer cities are committing with annual funding and nine-figure bond funds.

• It adds $550,000 to MNPS, which will ensure that pre-k programs can continue to expand.

• It adds $150,000 to the Department of Family Safety to support the YWCA, an organization doing essential work for survivors of domestic violence and others in crisis.

• It increases the MAC Workforce Fund by $25,000, bringing it to $715,300, with additional support going to Music City Construction Careers, which is a program helping Nashvillians access good-paying jobs in the construction industry (which is, not coincidentally, a critical part of our housing supply ecosystem).

• It adds $125,000 to the Office of Homeless Services, bringing that total to $17,358,600.

• It adds $68,000 to the Metro Public Library to fully fund a parking shuttle for downtown library staff, whose garage remains unusable.

• It funds the reserves required under our fund balance policies, which is a non-negotiable part of any revenue adjustment.

What’s Next?

The vote is tonight at Council. You can reach out to me by replying to this email or at [email protected]. You can also let your district council member and the other at-large members know how you feel about my amendment by following this link.

This isn't an easy call, and I want to be honest about the tension I feel. I believe that no one should pay taxes on the groceries they need to feed their family. But a blanket grocery tax cut also reduces taxes on a Wagyu steak, while doing relatively little for the family choosing between rent and groceries. When weighing $6 a month against investments that could actually lower someone's rent and childcare expenses, I decided we should target these large, structural items affecting our cost of living for those who need it most. That investment, in turn, positively affects our City’s long term resiliency, providing economic benefits to everyone.

News Around Town & Helpful Links

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What I’m Reading

I just finished reading Elena Ferrante’s Neapolitan Novel Series and The Road to Tender Hearts. I just checked out The House in the Cerulean Sea on the Library’s Libby app, and can’t wait to start reading it!

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