Koch supported group submits petition to roll back Nashville's property tax increase
A group with the backing of Americans for Prosperity — founded by the conservative donor network of the billionaire Koch brothers — dropped off about 20,000 signatures Wednesday to potentially place on the ballot a referendum to rollback Nashville's 34% property tax increase and limit Metro's ability to raise taxes in the future.
If enough signatures are verified, the initiative "Nashville Taxpayer Protection Act" led by local attorney Jim Roberts will be placed on the Dec. 5 ballot. The referendum looks to cap Metro Council to raising property taxes to 2% annually, without voter approval.
The proposed effort also calls for:
- Blocking the the city from giving away land valued at $5 million or more without the support of 31 council members.
- A voter referendum for any bonds totaling more than $15 million for some city projects, excluding schools, libraries, healthcare buildings and public safety projects.
- Have any Nashville pro sports facilities or related commercial development "revert to the people" if no games are played for more than 24 months.
- Any groups receiving $250,000 or more in public funds to be subject to open record laws.
Roberts and AFP Tennessee State Director Tori Venable are both confident their efforts would pass with overwhelming public support.
"If it makes it to the ballot, we will win." Venable told The Tennessean Wednesday.
AFP, a 501(c)(4) and lobbying organization, focuses on elections and policy debates at all levels of government, from city councils to Congress.
They expanded to Tennessee in 2013, giving money and resources needed to influence policy campaigns. Though largely focusing on state politics, the group helped campaign against a 2018 referendum in Nashville to raise the sales tax rate to fund a new transit initiative. Voters rejected the tax increase.
The group got involved with the latest referendum after Veneable said they were contacted by Roberts, who drafted the language, to see if the organization was interested in helping. "We absolutely were," she said.
Roberts said he also received help from Save Our Fairgrounds, a group he's represented in litigation with Metro over the MLS stadium, as well as No Tax 4 Nash, a group with a failed attempt this summer to recall Mayor John Cooper and council members who supported the tax increase.
Both Roberts and Venable declined to share financing details of the effort. But Roberts said much of it has been paid by him with small donations from residents "who feel strongly about this."
Cooper spokesperson Chris Song said the mayor has "commented extensively on the difficult, but necessary, decision to include a property tax increase" in his budget proposal this year.
"We appreciate the input of concerned residents as stated in the petition," Song said in a statement. "In accordance with the Metro Charter, the petition will go to the Election Commission for verification of signatures. And in the meantime, Metro Legal will review the petition."
Others also worry about AFP's involvement.
"It's sad to see hyper-political secret outsiders meddle in Metro government," At-large Council member Bob Mendes told The Tennessean. "People who work in secret don't have Nashville's best interest in heart."
Mendes is the council's outgoing budget chair, whose substitute budget was adopted by the council in June.
Venable said it was a grass-roots organization with voluntary donors while Roberts called criticism of "outside money" as "crazy talk."
"Every dollar came from Nashville, Tennessee. Every single penny. Period," he said.
If approved for the ballot, the group will be required to report financial disclosures.
Nashville's property tax hike
Metro Council passed a 34% property tax hike and broad cuts as the city moved to respond to the economic downturn tied to the COVID-19 pandemic. Even before the pandemic, the city faced a difficult finances.
Earlier this month, the Cooper administration and Finance Director Kevin Crumbo said they would not propose a lower property tax rate because of the remaining economic uncertainty around the pandemic.
It would be irresponsible, Crumbo said, to diminish the city's fiscal position until there is more evidence the economy is stable and the balance between revenues and spending is reliable.
The decision effectively blocks any attempt from officials to lower Metro's new property tax rate. While council members can initiate a new tax levy a new rate has to be certified by the director of finance.
The Metro Charter only gives the director the authority to set revenue projections or fund balance availability, so if Crumbo determines the revenues to set a new tax rate are not accurate, the council cannot move forward.
At-large Council member Steve Glover along with others are working to make possible charter amendments to extend finance authority to the council.
Group argues cuts needed first
Roberts and Venable argue officials haven't effectively put together a "crisis budget," with spending "as usual." Cooper, they said, should lower the tax increase particularly with the news that revenues came higher than projected for the first few months of the pandemic.
If the referendum efforts are successful, it would mean the city would need to make changes to balance its current budget.
"There are a number of things that the city should and should not be doing with spending for a balanced budget," Venable said. "But that's going to be up to the Metro Council and the mayor. It absolutely needs to come through cuts."
Everything that is not a core function of government should be on the table, she said, including furloughing and potentially laying off Metro employees.
"I don't see why Metro Council and the mayor should think that government employees are above or insulated from what's happening to other people," she said.
"This is not all Mayor Cooper's fault. Not all COVID-19's fault. This is decades of fiscal mismanagement that have come to roost. It's time to fix the problem instead of slapping a band aid on it."
Roberts said Cooper, who ran on the campaign of getting the city's fiscal house in order, could have been successful in making a pitch to taxpayers for a moderate tax increase to meet the needs of the pandemic.
However the increase he proposed, "went to far," he said.
Every tax rate change in the history of Metro has been larger than the 2% cap proposed by Roberts. Every four years there is a property reassessment and a state required equalization pushes the rate down. Nashville had its last property reappraisal in 2017 but did not raise property taxes afterward, a typical move by the city to more fully capture revenue from the rise in property values.
"It's important that this referendum be understood for what it is — a cynical effort to damage Nashville. The referendum language is out of step with any historic practice at all," Mendes said.
Roberts said he selected the cap for a 2% increase because he believe its low enough that if the council passed that hike each year, it would be a gradual enough increase to match inflation. And if every couple of years it needs to be larger, the mayor "as a good steward" should have to be forced to make the case to the public.
It's a similar argument made earlier this year by the state Sen. Mike Bell, R-Riceville, and the lobbying arm of the Beacon Center of Tennessee as they pushed for a statewide cap on property tax increases to 5% without going to voters for approval.
Beacon Impact, the lobbying arm of the conservative think tank, at the time told The Tennessean their efforts to cap taxes should not be seen as a partisan issue but one of "basic fiscal responsibility."
Nashville already has a property tax limit. Voters overwhelmingly approved a Metro Charter amendment in 2006 that caps the city’s Urban Services District property tax rate at $4.69 per $100 of assessed value — the rate at that time. A public referendum is required to raise it above that figure.