Metro will receive $132 million directly from the federal government as part of economic stimulus bill signed into law by President Joe Biden last week.
Nashville Mayor John Cooper’s office is still working through what the passage of the American Rescue Plan means for the city, his spokeswoman said last week.
The federal funds don’t come with the same spending limitations that came with the stimulus package passed last summer. The $121 million the city received under the first stimulus bill were required to be spent on direct costs related to the pandemic and relief for those directly impacted.
Cooper’s spokeswoman said a key driver that will inform the distribution proposal Cooper sends to Metro Council is how much can be targeted for health, education, housing, transportation and financial assistance for individuals and small businesses. Cooper’s advisers are also researching the rules for spending this round of funding and how “we can best and most equitably complement funding that will go to community partners in Nashville,” spokeswoman Andrea Fanta said.
“As we unpack this giant legislation, there are relief resources available now, including $20 million in emergency rent and utilities relief through Metro Action Commission and $3.8 million in financial assistance through United Way,” Fanta said.
The federal funds come during a budget cycle where Metro is working through the fortunate dilemma of sales tax collections coming in substantially higher than anticipated.
Cooper and council raised property taxes about 34 percent last year. There is already chatter that between the better-than-expected sales tax revenue and the new no-strings-attached federal funds, the city could possibly reduce the property tax rate.
Metro Councilman Steve Glover, a fiscal conservative whose budget amendment to raise the tax rate about 12 percent last year failed, said he believes the rate should be lowered this budget cycle. Glover said he hasn’t determined the final number, but he anticipates filing a budget amendment to reduce the 34 percent increase at least by half.
“Let’s be very clear not only have people suffered, they’re still suffering,” Glover said. “For us to act like we don’t need to put the money back is pure selfishness.”
A year ago, Cooper appointed an advisory committee to issue recommendations for how to spend the money and abide by the rules the initial stimulus implemented. The committee spent the city’s funds on housing assistance, public health expenses related directly to the pandemic response and small business help, including funds for music venues forced to shutter because of government orders.
Metro Councilman Bob Mendes said that he needed to research how this round of funds can be spent, but his initial reaction is Metro Nashville Public Schools’ deferred maintenance projects and the city’s depleted fund balance are two worthy expenditures. MNPS has at least $500 million in deferred maintenance projects and Mendes said the city’s cash reserves would only cover about two weeks of expenses in an emergency.
“If it doesn’t have the strings attached then that sort of opens the conversation a bit,” Mendes said. “For me, coming into big chunks of money that is completely unencumbered doesn’t happen often. The first thing that comes to mind is get your fund balance above two weeks of cash, and the school system has an ungodly high number for deferred maintenance and capital needs.”
MNPS will receive about $130 million from the stimulus bill passed in the final weeks of President Donald Trump’s administration. Though the district doesn’t know the final number, MNPS is expected to receive approximately $275 million in additional funding under the American Rescue Plan. However, the schools’ funding must be spent on learning loss and acceleration, facility improvements, long-term closures, unique needs of special populations, educational technology, mental health and maintenance of operations due to the pandemic, a district spokesman said.