Nashville Mayor Vows Property Tax Decrease

By Nate Rau, Tennessee Lookout

April 16, 2021

Nashville Mayor John Cooper touched off a public relations firestorm Friday by doing a local television interview tour that left the false impression that property tax bills are set to come down.
Cooper told WSMV and NewsChannel 5 that property tax rates will fall this year. That’s true, but it’s a legally prescribed process based on the property reappraisals that take place every four years.

Property owners will soon receive letters in the mail informing them of their reappraised property value, and the state equalization law requires local governments to reset the property tax rate so that they don’t collect a windfall based on values increasing.

There’s no doubt that property values have skyrocketed over the last four years, perhaps as high as 60 percent in some neighborhoods. The property tax rate will come down, but what actually matters – residents’ property tax bills – will mostly be the same as they were after Cooper and Metro Council imposed a 34 percent increase last year.

It's unfortunate that the mayor gave such a confusing interview this morning. We've all known the tax rate was going to go down because of the reassessment not because of anyone's stewardship. – Metro Nashville Councilman Bob Mendes

“With stewardship, we’ve managed our way through all those financial difficulties a year ago to an environment where the city can prudently do this. We’ve restored our balance sheet, our finances,” Cooper told NewsChannel 5.

Metro stakeholders have credited Cooper with stabilizing the city’s finances over the last year. It was expected heading into the budget cycle last year that a smaller increase would have been necessary. But then Nashville was clobbered by a tornado and the COVID-19 pandemic, which forced the higher increase.

Some Metro Council members had pushed for an increase for several years, but failed to pull it off during budget season.

On Friday, Cooper may have been hurt by the television stations sending out confusing social media posts touting their interviews as if it was a major announcement about property taxes, instead of an explanation of the bureaucratic, legally-required rate-setting process.

“It’s unfortunate that the mayor gave such a confusing interview this morning,” Metro Councilman Bob Mendes said. “We’ve all known the tax rate was going to go down because of the reassessment not because of anyone’s stewardship. I’m not expecting that taxes people pay will go down.”

The confusion over the property tax rate comes on the eve of the Davidson County Election Commission meeting on Saturday to consider a proposed referendum that would completely overhaul how Metro government functions.

Justin Owen, CEO of the Beacon Center, a libertarian non profit think tank, said Cooper’s comments that the property tax rate increase will be “reversed” was “misleading and irresponsible.” Cooper is correct the rate will drop due to property values increasing, but tax bills will be untouched.

“This gives Nashvillians the false impression that after an extremely difficult year, they will see their property taxes go down substantially when in fact that is likely not the case for many of them. The rate adjustment is required by state law,” Owen said. “Because most Nashvillians’ home values have actually gone up in value over the past four years, even the reduced rate will not mean they will pay less in total taxes. Some property owners will actually end up paying more in property taxes despite the required rate cut. Mayor Cooper’s words are dangerous and distorting, and he needs to be held accountable for spreading misinformation.”

The charter amendment proposal would rewind the property tax rate to its level prior to last year’s increase and block Metro from raising it more than 3 percent without voter approval. There are significant legal questions about whether that proposal passes constitutional muster, and whether it followed state law to get the measure on the ballot. It’s unclear if the election commission will actually set an election date at its Saturday meeting since it appears the anti-tax group 4GoodGovernment has achieved the sufficient number of signatures to force a referendum. Regardless, the issue is heading to Chancery Court to be litigated.

As the city enters the budget season, Cooper and council must navigate complicated issues. Sales tax collections came in better than anticipated. Over the next two years, the city will see about $267 million in federal stimulus funds thanks to the rescue plan passed by President Joe Biden and the Democratic-led Congress. But that money won’t directly affect this year’s budget, and the city’s rainy day fund remains below its desired levels.

“The work we did last year laid the groundwork for the city to get in much better financial shape,” Mendes said. “About the only way we can screw it up is by having the mayor and the council retreat the tax rate. I think the city needs to maintain the policies put in place last year for two or three more years at least in order to be able to afford the kinds of things that people want from a growing city.”

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