June 19, 2005

Metro Budget Proposals

As early as this week, there will be several alternative proposals to the mayor's proposed budget (ie...the 84 cent property tax increase). One of those proposals will be a one year COLA budget (Cost of Living Adjusted) which will essentially take last year's budget and only account for a cost of living increase.

However, from what I am hearing from my sources near the Metro Council, that budget has no chance of passing. 1) There aren't enough votes, and 2) there are some hidden costs that have been discovered. Because of those hidden costs, even a COLA budget by itself would require at the very least a 20 cent increase in the property tax rate (*note...all increases in the property tax rate mentioned here are based on the new certified rate of $3.98).

Metro Council Attorney Don Jones met with several council members last week and revealed a few recurring debts that haven't exactly been shown to the public. The administration apparently has agreed to pension funding levels that are three times the rate of inflation which puts Metro in a situation where the debt is in a continual mode of growth. The Purcell administration also raided $12 million from the school's rainy day fund last year and now must repay that debt in this upcoming year. Lastly, several consulting contracts that have been signed are going to be coming home to roost costing even more money.

So, you take the COLA budget plus the above costs, create a 20 cent property tax increase and there may still not be enough votes when the day is over (there isn't enough "new" spending). Because of this, another budget proposal will be put forward by the Council's Republican caucus. It will be a one year, COLA budget (instead of the regular four year budget) which will include the following:

-2.9% increase in all spending over last year for every item Metro purchased or invested in insuring that the status quo is maintained for all items over last year (2.9% is the CPI).

-A 4.5% increase in pay for all Metro employees (Mayor's budget offered 3%).

-An increase in property taxes of 35 cents (49 cents less than the Mayor's proposed increase) to cover the hidden costs plus the raises.

This budget is going to be promoted by the Republican caucus as being 1/3rd of the cost of the Mayor's budget and only 20% of the School Board's request.

Of course, the COLA budget with the 10 cent increase will be offered up for a vote first (including allowing the people to vote on any increases), but that probably won't pass. From what I've heard, the 35 cent increase will probably have enough votes to pass. On a side note, Councilman Buck Dozier was going to propose a 45 cent increase budget, but this one even undercuts him (Councilwoman Diane Neighbors was going to introduce a 74 or 75 cent increase).

As far as school spending goes, read my previous post on that. I'd also like to point out that one argument that they've been using regarding free lunches is inherently flawed because they have $9 million in reserve funds sitting out there in the school lunch program (Metro Nashville School budget pg 34-35). Board members conveniently forget to mention that when they are making excuses for failure while coming up with reasons they need more money.

There is no way around it...if you live in Nashville and own property, your taxes will be going up (as of right now I'm not sure where the 1/2 sales tax increase stands). It has become very apparent that the Metro government has been living beyond its means, and now the taxpayer must pay.

More: Bob notes in the comments, and rightly so, that even if you don't own property, you'd still be paying indirectly through higher rent.

Comments:

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Two comments:

One key of both alternative proposals is that they are one-year budgets. Currently we operate on four-year budgets. That allows council to pass a budget two years after they take office and two years before they run again. Ideally, we'd have one-year budgets and staggered four-year terms. That would mean that every two years half of the council would be on edge because they'd be up for re-election. But at least getting to one-yar budgets should help to check the county's spending.

And the other issue is that Blake said, "if you live in Nashville and own property, your taxes will be going up." Even if you don't own property, your expenses are going up. If not directly via a wheel or sales tax, then indirectly when your rent is raised to cover the increase in property taxes.

Posted by: Bob K at June 19, 2005 11:03 PM