Friday, March 25, 2016

No tax increase in 2016 but look for a whopper of an increase in 2017!

Mayor Megan Barry has announced that she will not seek a tax increase this year.  I am not surprised. It takes a while to get a handle on the needs and scope of Metro government and usually new mayors do not ask for a tax increase their first year in office. I do expect a large tax increase, however, in year 2017. Here is why.

Mayor Barry has a mandate to raise taxes. Like it or not, when Nashvillians went to the polls in 2015 we elected the most progressive candidate for mayor of the slate of candidates running.  Anyone who voted for Barry was essentially voting for a tax increase. We who want a more efficient and innovative government and less government, lost the election. Not only did the candidate for mayor most likely to raise taxes get elected, but in those contested council races in which the contest was between a less liberal candidate and a more liberal candidate, in almost every contest the more liberal candidate won. Elections have consequences.

Advocates for more and more government spending are relentless in their quest while opponents of tax increases only pay attention in the year of a proposed tax increase. I served in the Council in the decade of the 80's and have observed the operation of Metro government for many more years. Day in and day out, year in and year out, advocates of more spending push for their favorite cause; advocates of low taxes only speak out in the year of a proposed tax increase. If you watch the pubic hearing on the budget, in a year in which there is not a proposed tax increase, speaker after speaker will urge more funding for their favorite cause. There is an absence of those who call for abolishing departments or ending funding for any project or who point out wasteful spending or who call for reform or call for efficiency studies. No one ever says taxes should be cut. The pressure is always for more and more spending.

In 2012 when Mayor Dean raised taxes 12% there was a lot of people organized by The Nashville Tea Party wearing day-glow lime green tee shirts with the printed message "no tax."  These people have not been seen since.  In the meantime, the Council has heard from Friends of the Library, Friends of the Parks, advocates of saving General Hospital, family of firemen and policemen, advocates of more sidewalks and greenways, and advocates of public education. They have not heard from those concerned about waste and inefficiency and the burden of high taxes.  No one appears at the budget hearing arguing we should privatize General Hospital or abolish the Department of Human Relations. No one points out that one of the reasons we have less affordable housing is that high property taxes discourages new affordable housing and makes existing affordable housing less affordable.

Mayor Barry has structured the budget process to build a case for more taxes. Up until this year, the Mayor in giving direction to department heads to prepare for the Mayor's budget hearings would instruct them to present their budget and include in their presentation what cuts they would make if they got x% less than they requested. This year, Mayor Barry has asked department heads instead of following that "old model" to look ahead at the next three years and take a strategic approach to "solving our problems."  She is calling her budget hearings, "public investment plans." Even the formality of looking at cost saving is out the window.

Tax increases will be hidden in the reappraisal process.  This year all property in Nashville will be reappraised to reflect current market values. By law, a general reappraisal cannot result in more tax revenue. A reappraisal does not raise more taxes but equalized taxes to reflect current values. By law, the city must adopt a tax rate that bring in no more revenue than was realized before the reappraisal. What will most likely happen is that the council will adopt the new certified property tax rate and then in the same meeting, adopt a new higher tax rate. Since most of the public does not understand this process, they will blame much of their higher property taxes on the reappraisal.

Here is a link to The Tennessean's report on the Mayor's announcement that she would not be seeking a tax increase: Megan Barry rules out tax increase in first budget.

Below is Mayor Barry's budget announcement.

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