The old idiom of “kicking someone when they are down” seems to be the new motto of Nashville’s Metro Council. Amidst the coronavirus pandemic, high unemployment, and sky-high real estate prices, Metro government is proposing new taxes and fees on Nashvillians while many are struggling to make ends meet. While the recent property tax hike proposal is getting all the attention, the Metro Council is also considering a bill that would enact an impact fee—a fee on all new developments before they can be built, which is usually justified as a way to cover the cost city services being added to a new area—on all new residential and commercial buildings in the city, adding thousands of dollars in construction costs that will inevitably be felt by consumers and new homeowners.
Years of poor fiscal mismanagement by the Metro Nashville government has created a huge hole in the city’s budget. The city’s tax revenue had been growing for years before COVID-19, but Metro Council always seemed to find ways to outpace the revenue growth with more and more spending. Instead of getting spending under control, previous administrations chose to do things like give millions of dollars in corporate welfare to large corporations to relocate downtown. Millions more were spent on sports arenas that continue to sit vacant, with the answer to when they will reopen still unknown.
Every year, Beacon has to call out waste, fraud, and abuse by local and state governments in our annual Pork Report. But this year, we have an even better way to hold these governments accountable. On July 1st, Beacon is releasing the City Freedom Index (CFI) with the July 4th hook. The study will evaluate the ordinances and codes of the 30 most populous Tennessee cities. We will track increases in taxes, fees, and restrictive ordinances like this impact fee proposal by Nashville will serve as a resource for Tennesseans and local lawmakers—to see what their city is doing well and where positive reforms can be made. Nashville’s proposal to jack up property taxes and to implement an impact fee not only hurts their CFI ranking but more importantly, hurts the citizens and future residents of Nashville.
Pushing for higher taxes and fees in a time when so many are struggling is not the solution to Nashville’s budget problem. The Beacon Center has offered policy solutions outside of the tax hike, but if city leaders choose not to consider them, the City Freedom Index will reflect those choices. Our hope is the CFI will be a tool to keep those local government leaders accountable, to increase transparency, and to make Tennesseans question why their city may be limiting their freedom all while increasing the cost to live there. Local governments shouldn’t be kicking citizens while they’re down, but protecting the freedom of citizens to lift themselves up.