Metro finance chief says property tax increase can’t be ruled out

Monday, January 18, 2010 at 12:00am

With all signs pointing to a potentially brutal budget process for the next Metro fiscal year, Metro Finance Director Richard Riebeling told The City Paper all options are on the table, including a property tax increase.

If in fact Mayor Karl Dean does propose raising taxes for the next fiscal year that begins July 1, he’d be in good company. Every mayoral administration since the inception of Metro government in 1963 has raised them.

The subject is on the minds of Metro Council members and others because of, among other gloomy forecasts, an estimated $35 million shortfall for Metro schools for the 2010-2011 fiscal budget year. Because its reserve funds are sufficiently tapped, that would mean the district possibly slashing its $620.7 million budget if the mayor’s office and Metro Council can’t find a revenue source to make up the difference.

When asked if increasing taxes is an option, Riebeling said, “When you go into the budget process, everything is on the table.”

Riebeling said he’s met with school officials and believes the $35 million forecast may actually be on the high side –– a projected $12.4 million in additional employee pension funds, for example, is probably a little off.

Though Riebeling acknowledged the district might have to “do some things differently or do without some things,” he said, “it’s too early to tell,” and his intention is to make sure schools don’t have to make substantial cuts.

“Clearly that’s my goal,” Riebeling said. “Cutting schools by $35 million is not something that we’re looking forward to doing. I think we’ll be able to get there.

“You’ve got to look at the totality of everything in the budget,” he added. “The mayor’s commitment is still with schools, and that’s not going to change.”

Metro Council Budget and Finance Committee Chairman Ronnie Steine said there simply are no new revenue streams around and that “they’d have to be generated from somewhere.”

One option would be for Metro to institute a 56-cent property tax increase, the same amount by which the property tax rate was reduced after last year’s every-four-year property reappraisals. State law dictates that reappraisals be revenue-neutral, so the rate is adjusted downward to ensure the city brings in no more money than it did the previous year.

Steine said he hasn’t heard anyone from Dean’s administration mention that as a possibility at this point in time, though the idea is floating around.

History shows administrations typically recommend a rate increase to Metro Council during reappraisal years. In four of the last five reappraisal years, the certified rate has been increased — by 67 cents in 2005, by 91 cents in 2001, by 54 cents in 1997 and by 63 cents in 1993.

During Dean’s campaign in 2007, he said he had no plans to raise property taxes, but he stopped short of a first-term pledge against doing so.

“I am against any increase in property taxes,” Dean said then.

13 Comments on this post:

By: Anna3 on 1/18/10 at 9:10

OK Everybody...Lets recap the situation...
(1) Karl Dean runs for Mayor and gives the "Read My lips" "No new Taxes" Pledge in order to win...because Bob Clement was kicking his butt.

(2) Dean proposes to spend $1 Billion Dollars of Taxpayers money tp build a new Convention Center and Hotel. This proposal is made by Dean even though our Schools, Police, Fire, Parks, and Public Works are underfunded. In fact Dean cuts the budget of the juvenile court services and clerks office for the third year in a row and defunds a battered women's shelter in the city. Dean forces expenses on the Metro Water Department that requires rate payers bills to increase 10%. Metro Water passes on costs to you due to shifting of expenses previously paid by property tax funds. Dean re-emphasizes that his priority and our priority will and should be his $ 1 Billion dollar Convention Center...since he believes that it will solve Nashville's unemployment woes.

(3) Today Rich Reibling announces that a Property Tax increase is probably unavoidable....even though its the worst economy since the great depression, we face unprecidented tax increases and unfunded mandates from the Federal Government. Reibling explains that the $1 Billion dollar Convetion Center proposal had no impact on the budget or need for a property tax increase.

WILL YOU REMEMBER THIS AT ELECTION TIME? DEAN IS COUNTING ON YOU...FORGETTING ALL OF THIS!

By: wolfy on 1/18/10 at 9:37

Every department has cut it's budget during the three years since Dean has been in office. In some departments, it was more like gutting than cutting. Couple that with the fact that city employees haven't had a raise of any sort during that tenure. And I think all Metro employees are good with that because they knew the dire straits the economy was in. This was until Dean started asking for a convention center that we don't need. Even when we can't even fill the one we have. You knew he had to raise taxes for the simple fact we can't pay for things when the income is down. I'm with Anna3, remember this at election time.

By: idgaf on 1/18/10 at 10:07

In light of this how could anyone sane proposed to spend a BILLION dollars on a Convention Center.

Do they even consider that by denying us a vote on it that we will make our own vote when it comes to property taxes and vote heck NO.

These people are either morons or think we are.

By: Nashgal on 1/18/10 at 10:28

No worries Anna3 I will be remembering all of this. I am also going to be watching the vote by Metro Council and if my Rep on Metro Council votes for the convention center I won't be voting for him again either!

By: govskeptic on 1/18/10 at 10:41

Now that he's almost got the "Pink Elephant" clearance, it's on with the
expected tax increase. 14 million from the current tourism tax will have
to be made up in the general fund, as well as the never discussed lost
of $600,000 yearly in tax revenue currently paid by the owners of the
property the MCC to be built on. With most parcels of property in the
county being Over Appraised as to value and as Forber magazine
stated recently Nashville being # 10 in the Nation as Over Priced
for those on the market it will be a good year to collect from WE
the property tax payers. Doesn't matter what the TRUTH in value
is, it's what the Government says it is.

By: jsnap on 1/18/10 at 12:09

I thought the citizens had to vote to approve a property tax increase. That's what was approved last year.

By: localboy on 1/18/10 at 12:31

all for it

By: CitizensWin on 1/18/10 at 12:48

“When you go into the budget process, everything is on the table.” rRch Reibling

Including the Hotel Occupancy Act?

just asking

Light a Candle For Metro Council To Vote No to the Music City Center
On Tuesday January 19th, Join Us at
One Public Square ( Metro Courthouse )
Music City Center Opponents are encouraged to attend a rally and place a
candle on the courthouse lawn during the hours of 5pm-8pm.

Each of 600 Candles will represent 1 million dollars for the 600 Million Dollar Proposal. Forming a pie chart that represents the 72% of the public who wants a referendum thus creating a V for vote.

By: kennyj on 1/18/10 at 1:32

Anyone that believes a politician's campaign promises is ignorant of history, they don't come to fruition--look at the Federal politicians in particular. The City has the same attitude as the Feds--to hell with public opinion, we're going to spend money to build edifices to our egos.

Metro has a tool at its disposal that doesn't require voter input---property evaluation. If they can't get the money in tax rate, they'll leave the rate the same and increase the evaluation regardless of what the real estate market is showing. They don't even have to come out and inspect the property, it's all done from their cushy seats.This was demonstrated in the last evaluation and don't believe for a minute that an appeal will do any good.

By: AmyLiorate on 1/18/10 at 2:01

Does anyone find it ironic that the school budget is wanting for $35M and that is almost exactly what the MCC will cost each year?

I see Dean's legacy:
Building for tourist while the everyday citizen is left with poor civil services.

By: dogmrb on 1/18/10 at 2:03

If Clement was kicking Dean's butt, why did Megan Barry get more votes for CM in the run-off than Clement got for Mayor?

By: fightcrib on 1/18/10 at 4:52

Sometimes higher property taxes can be a good thing. They weed out the riff raff in borderline neighborhoods.

By: nashtnman on 1/18/10 at 6:31

And our asshole mayor was to build a 625M convention center. Has everyone had enough yet? Hows that vote working out for you?