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A referendum that would give Nashville voters the ability to approve property tax increases and bond issuances is on shaky legal footing before it ever gets added to the ballot.
The Metro Department of Law, led by Director Bob Cooper, has advised the Election Commission not to put the referendum on the ballot in December because of major legal flaws in the proposal, multiple sources told the Tennessee Lookout. The Election Commission will meet on Friday to consider approving the referendum and scheduling a special election.
Mayor John Cooper came out in adamant opposition to the proposal on Monday, outlining in a press release the financial problems the proposal represents for the city.
The referendum proposes to give voters the ability to approve property tax increases more than 2%, blocks the transfer of city-owned property without approval of 31 Metro Council members, requires voter approval for bond issuances of more than $15 million, reverts the fairgrounds mixed-use development back to taxpayers should the Nashville SC leave town and overhauls the city’s public records laws to add more transparency.
In 2006, voters approved a charter amendment proposal by referendum. That proposal capped the property tax rate at $4.69 per $100 of assessed value, and required voter approval in order to raise the rate above that.
But, a 2006 legal opinion written by assistant legal director Sue Cain and approved by then-Director of Law and future Nashville Mayor Karl Dean said the 2006 referendum was illegal.
Cain said in her opinion that the Tennessee constitution gives local governments the ability to set the property tax rate and that the proposal, backed by anti-tax organizer Ben Cunningham, was therefore illegal.
The executive committee of the Metro Council at the time asked the Department of Law if the referendum, which had passed by that time, was legal. Cain said no, setting the stage for a future mayor to raise the property tax rate past the $4.69 limit and then defend that decision in court.
“… it is the opinion of the Department of Law that a court is likely to find this provision of the Metropolitan Charter is invalid because the Tennessee Constitution has vested the General Assembly; vith the power to authorize counties to impose an ad valorem tax on property, the General Assembly has authorized the county legislative body to levy the tax and required the county legislative body to determine the amount of the tax. The General Assembly has not authorized the charter of a consolidated government to limit or restrict this authority of the local legislative body,” Cain, who went on to serve as Dean’s top legal adviser, said in her 2006 opinion.
Chris Song, a spokesman for John Cooper, acknowledged that the legal department is “continuing to examine the legality of the proposed charter amendment at this time.”
The Tennessean reported on Monday that the ballot initiative collected the sufficient number of signatures needed to trigger the special election in December. That leaves it to the Election Commission to certify the signatures and set the special election for the referendum. It is unclear if the legal problems identified by Cain’s legal opinion are the reason the legal department has advised the Election Commission not to put the referendum on the ballot, or if there are other problems with the proposal.
Metro Council attorney Jon Cooper, not related to the mayor or the legal director, also raised questions about the legality of the referendum proposal in analysis released earlier this month.
John Cooper’s administration said in a press release on Monday that if the proposal was passed by voters in December, it would cause the city to drastically slash the schools budget.
“This would cripple our city and gut essential city services,” John Cooper said. “After two natural disasters this year, we don’t need a self-inflicted one. This would severely weaken Nashville at a time when we need to build Nashville stronger.”
In mail pieces sent to Davidson County voters earlier this summer, attorney Jim Roberts, representing backers of the Nashville Taxpayer Protection Act, argued the referendum is necessary in order to “rein in (Metro) spending, cut waste and stop giving away our city, parks and public lands for free.”
Roberts did not immediately respond to a request for comment about the mayor’s criticisms, or about legal questions regarding the referendum.
The anti-tax proposal has the backing of the Tennessee chapter of Americans for Prosperity, the conservative group backed by the billionaire Koch brothers.
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