The Tennessean recently delved into Metro Nashville’s crushing debt situation. As the story notes, the city’s debt has exploded by 44% since 2011, while revenues have grown at a much slower pace. Thus, city leaders are spending—and borrowing—more than they bring in each year.
To make matters worse, during the Great Recession, the city punted on paying down the principal on its debt for two years, paying only on the interest. Leaders also restructured the debt during that time, growing it by $47 million long-term.
Kicking the can down the road like this is poor fiscal management. But what’s worse is that no one is discussing the real problem. Some are calling to fix the debt situation with more revenue, aka a property tax increase. Sure, getting a second job to pay off your credit card debt would certainly help you do so, but if you still go on spending sprees every day, it won’t make much of a difference. And consider the contrasting fact that our state has among the lowest tax rates in the nation, yet has the lowest debt as well.
Let’s take a look at that credit card statement. During the debt explosion, Metro officials spent taxpayer money or borrowed even more to, among other things:
- Build a $600+ million convention center;
- Erect a new Minor League Baseball stadium that cost $26 million more than promised;
- Open a $52 million amphitheater for downtown concerts; and
- Help pay for a new $275 million Major League Soccer stadium, much of which taxpayers will be on the hook for if the venue fails to raise enough revenue to pay off the debt payments.
With spending habits like these, no wonder we’re maxing out our credit card. Fortunately, a new task force with some good fiscal hawks on it is looking to identify $20 million a year in savings in the city’s budget. That’s a good start, but it’s going to take more than trimming fat around the edges to get Nashville’s fiscal house in order. We need to go on a full-blown diet.
Next time city officials tell you we need to raise property taxes or help fund a political pet project, just remember what they’ve already charged to our credit card bill. The city isn’t lacking revenue. Its officials have a spending addiction. It’s time to cut up their credit card before this debt bomb blows.