Historic Metro Nashville Courthouse (Photo: Nashville.gov)
The proposed Metro charter amendment, currently slated for a special election on July 27, wouldn’t bring residents much property tax relief any time soon, critics say.
The property tax portion of the proposal, which would completely overhaul how Metro government functions, seeks to reduce the property tax rate to its level prior to last year’s record 34 percent increase. The residential property tax rate for most residents prior to the increase was $3.155 per $100 of assessed value.
Because Davidson County is in a reappraisal year, the property tax rate was already going to be reset as part of the upcoming Metro operating budget process. State law blocks local governments from making a windfall as the result of the reappraisal.
That means the property tax rate is reduced proportional to the average countywide increase. The new tax rate under Nashville Mayor John Cooper’s proposed budget would be $3.28 per every $100 of assessed value.
We have the challenges that growing cities have around housing and affordability. This referendum doesn't do anything to help with those issues, it would only make them harder to solve.
– Jason Freeman, SEIU Local 205
As a result, even if the anti-tax portion of the referendum was approved, property owners would see a reduction of 3.8 percent. Zillow.com lists the median home sale at $330,757. So for the median home value, the property tax savings would be about $110 per year (the difference between a tax bill of $2,718.82 under the current rate or $2,608.85 under the rate proposed by 4 Good Government).
Jason Freeman, political director for the service employees union SEIU Local 205, which opposes the referendum, said the charter amendment proposal is misleading to voters.
“We have the challenges that growing cities have around housing and affordability,” Freeman said. “This referendum doesn’t do anything to help with those issues, it would only make them harder to solve.”
The property tax amendment does contain another provision that would require voter approval for any proposed increase of more than 3% in the future. So even though the proposal would hardly achieve any tax relief this year, it would force city leaders to make their case about the need for larger increases in the future.
There is already a provision of the charter, passed by voters in 2006, requiring voter approval for any proposed increase that would take the rate over $4.69 per $100 of assessed value – the rate at the time of that referendum pushed by anti-tax activist Ben Cunningham.
At the time that proposal was being considered, then-Metro Legal attorney Sue Cain wrote a legal opinion making the case that the state constitution grants local governments broad taxing powers. Cain contended that the 2006 referendum capping the rate at $4.69 without voter approval was illegal and likely to be struck down by the courts.
But, Metro has never come close to an increase that would take the rate over $4.69 since then so the issue has been moot until now.
Attorneys for Metro filed a lawsuit making the same point Cain did in her memo that the anti-tax provision in the 4 Good Government proposal is unconstitutional and therefore should be thrown out.
There’s also the question of timing. Metro Council must pass a budget in time for it to take effect prior to July 1, the start of the new fiscal year. Since the referendum takes place 26 days after the new budget will take effect, there is also a legal dispute about whether the proposal would be able to be implemented even if it passed.
The Republican-appointed members of the Davidson County Election Commission voted to have the election on July 27, the earliest possible date suggested by the commission’s staff, so that the anti-tax amendment would have a chance to take effect if it is approved by voters.
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