Sunday, March 11, 2018

Glen Casada: If Nashville politicians cannot control their spending, voters need to know the truth and prepare for the long-term consequences.

Glen Casada
by Rod Williams - Representative Glen Casada writing in today's Sunday Tennessean in an article titled Nashville should follow Tennessee on Finances, makes a point that I have repeatedly made on this blog.  Nashville is awash in money, yet the city is broke.  Due to growth, more money is flowing into the city coffers than every before. However, we are dipping into reserve funds and borrowing money.   At a February 7th Council meeting, in order to throw more money at Metro's failing General Hospital and prop up an unnecessary institution no one wants to use,  the Council had to  take $3.9 million from the city's "undesignated fund balance," which serves as a rainy day fund for the city. (link) This is irresponsible.

In early February, former Mayor  Megan Barry began the process of building the case for a tax increase. She laid out "fiscal challenges" for the next city budget. The challenges she identified were these:
  • Fund balances for each of the six tax funds are at or are projected to be below policy targets at the end of fiscal year 2017-2018 and those fund balance reserves must be increased; 
  • Escalating health care costs combined with the Tennessee General Assembly not acting to expand Medicaid; 
  • Property tax appeals following last year’s reappraisal far exceeded the level of appeals after the last two reappraisals, and the full impact to revenues will not be known until the end of this fiscal year;
  • There will be further reductions in revenue from the state Hall tax on certain investment income, which the state legislature has voted phase out; 
  • After a couple of years of acceleration, revenue growth in the six tax funds is returning to normal levels; Increased debt service requirements
You will notice from the former mayor's list that two of the "challenges" she lays at the feet of state government: the failure of the Tennessee General Assembly to not expand Medicaid and the phasing out of the Hall income tax.

Glen Cassada takes her to task for attempting to blame Metro's financial difficulties on the state of Tennessee. He is right. Metro has been spending money like a drunk sailor and the State of Tennessee has been acting with prudence and sobriety. The State of Tennessee has been shrinking the number of State employees and looking at opportunities to cut cost and Metro has thrown caution to the wind and increasing the reach and scope of government. Also, it seems someone would have to work hard to waste money the way metro waste money. When the city appropriates $60 million for a sidewalk program and only gets 3.5 miles of new sidewalks, something is terribly wrong.

A real danger for Nashville is not the current overspending, but what will happen if the Nashville economy has a down turn.  As long as ever things clicks along on all cylinders we will be OK, We may have to pay slightly more in taxes but we will be able to keep the city functioning. It want be a crisis. However, if the taxpayers approve it, we are about to take on $9 billion in additional debt to build a mass transit system, the largest project in Nashville's history. What if alternative technologies that are already being tested, come on line and make fixed rail mass transit obsolete?  What happens if we raise taxes on tourist to the point that Nashville is no longer a leading convention destination? What happens if we lose one of our sports franchises?  What happens if Nashville losses its "cool" factor and is no longer the "it" city? This is a time when we ought to be paying down debt and building a reserve instead of taking on more debt and spending down our reserve.

In response to the ex-mayor's attempt to blame the state not expanding medicaid as part of the city's financial difficulty, Casada says, " Democrats  do not understand that Tennessee’s government needs to be more than an insurance program run by taxpayers’ money."  He constinues:
According to the November 2017 Sycamore Institute’s analysis of the Tennessee budget, 45 percent of our state’s total spending already goes to health and social services.

What do you want cut? Should we cut from the education budget? Should we raise taxes on Tennesseans who work to balance their own family budgets?
In response the the charge that Metro's woes are due to the State's reductions to the Hall income tax, Casada says:
In place since 1929, the Hall income tax unfairly punishes entrepreneurs, business owners, and seniors who rely heavily on their invested retirement income to make ends meet by levying a tax on capital gain, dividend, and interest income.

Again, while it may make sense to Democrats to punish productivity, taxing those who have worked hard their entire lives, who have been fiscally responsible and frugal in their budgets, and who have saved for their futures is simply not the Tennessee way.
Rather than taking this leftist approach to governing, Nashville officials should instead choose to take the lead of the General Assembly.
He points out that under Republican leadership Tennessee is number one in the Southeast and number two in the entire United States for job growth over the last year. He says things like  tort reform and the overhaul of the State's workers’ compensation system have spurred job growth in Tennessee increasing state employment rate to the highest in the State's history.

Casada concludes by saying, "If Nashville politicians cannot control their spending, voters need to know the truth and prepare for the long-term consequences of the fiscal irresponsibility that seems to have become the new accepted norm in Davidson County."

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