Mayor Karl Dean’s two-month sales pitch for continued government investment ended in victory Tuesday as the Metro Council voted by a commanding 4-to-1 margin to approve Davidson County’s first property tax hike in seven years.
The council voted 32-8 to approve a Councilman Sean McGuire-sponsored $1.71 billion substitute budget for the 2012-13 fiscal year that includes the primary pieces the mayor laid out in his original budget in May, including a 53-cent increase on the city’s $4.13 property tax rate. The council also signed off on a bond resolution authorizing a robust $297.7 million capital-spending plan, one of Metro’s largest in years.
Dean has framed the 13 percent property tax increase as a necessary move to stave off “draconian” cuts, while also ensuring investments: addressing long-neglected infrastructure, raising teacher pay and giving Metro employees a salary bump. On Tuesday, the council agreed with Dean’s case by a sizeable margin despite many calling it one of their most difficult votes.
“It doesn’t require a tax increase to be an average midsized city that is satisfied with declining public service, indifferent to public health and public transit, and seek that quality public education is a luxury we just won’t afford,” At-large Councilwoman Megan Barry told her colleagues.
“But to sustain the energy and investment we already have going for us, the current revenue base simply won’t cut it,” she said.
In a statement following Tuesday’s meeting, Dean said he appreciates the council’s “thoughtful input and support to make the necessary investments to keep our city moving forward.”
The final vote Tuesday came after the council rejected seven amendments put forth by various council members that ranged from eliminating Dean’s tax increase altogether to slicing it by 12.5, 6 or 4 cents, respectively. None of these gained more than 11 votes of council support. Instead, the council opted to support an altered budget from McGuire –– the council’s Budget and Finance Committee chair –– that shifted $8.6 million in added revenue from government services to Metro reserves, but kept Dean’s 53-cent tax hike in tact.
“I’ve been through this budget backwards and forwards, and I do not believe we can make any more reductions without it being truly detrimental to the services we provide to the city,” McGuire said.
“My most fervent hope is that this $8.6 million in reserves will ensure that we as a council will not have to ask our citizens for another property tax increase in the next few years.”
Councilman Robert Duvall, the council’s leading tax hike critic who cast himself the “point person” for opposition, called the now-approved budget “a tax and spend plan.” The conservative Antioch councilman proposed cutting Metro schools’ budget by $29.6 million; Metro Hospital Authority by $29.5 million; Metro Transit Authority’s subsidy by $4.9; and eliminating the pay increase for Metro employees.
“In my opinion, if we don’t stop the spending now, we’re headed for a train wreck as we move forward,” Duvall said, maintaining that Nashvillians “overwhelmingly” disapprove the tax increase.
But the council defeated his measure by a 33-7 vote. Council members who joined Duvall to support his amendment were: Karen Bennett, Charlie Tygard, Josh Stites, Bruce Stanley, Tony Tenpenny and Duane Dominy.
Tygard, a conservative at-large councilman, cited what he called “red flags” in the budget, and offered an amendment that would have cut the tax increase by 12.5 cents, bringing it down to 41 cents overall. “I’m trying to put money back in the hands of citizens,” he said.
He singled out two “elephants in the room” that he said the approved budget doesn’t address: rising pension costs and outstanding revenue bonds that total $127 million this year. He said it is projected to rise to $176 million next year.
Tygard also provided some Metro tax increase history, pointing out that all but one council before this one lowered the tax levy below the mayor’s original request. “We’ll go on record as the second council in 50-plus years that has not reduced the tax levy on our citizens,” Tygard said. “That’s something I can’t be proud of.”
Nonetheless, Tygard’s budget amendment gained only four more votes than Duvall’s measure to eliminate a tax increase. The council defeated Tygard’s plan by a 29-11 vote.
The approved property tax increase means Nashvillians can expect to pay $16 more per month on average, or $192 annually, based on the county’s average home value of $145,000. At a public hearing two weeks ago, many Nashvillians criticized the tax increase for coming during a period of economic turbulence.
At-large Councilman Ronnie Steine described the calls, emails and letters from those “most sincerely suffering” during tough economic times as “literally gut-wrenching."
“No one involved in the process wants to raise property taxes, but some of us believe that we have to,” Steine said.
After amendments were defeated, the vote breakdown of Metro’s budget for the 2012-13 fiscal year went:
Aye (32): Barry, Steine, Garrett, Tygard, Maynard, Matthews, Harrison, Hunt, Banks, Scott Davis, Westerholm, Anthony Davis, Pridemore, Pardue, Glover, Stites, Stanley, Claiborne, Moore, Allen, Gilmore, Baker, Langster, Weiner, Holleman, McGuire, Harmon, Blalock, Johnson, Bedne, Dowell, Todd,
No (8): Bennett, Jernigan, Tenpenny, Evans, Dominy, Potts, Duvall Mitchell