November 15, 2006

Nashville Property Tax Charter Amendment Impact Grows

Knoxville political commentator Frank Cagle says the city charter amendment passed by Nashville voters giving themselves referendum power over property tax rate increases will have "major repercussions" across the state.

Cagle writes:

Almost unnoticed in the hoopla last week over the mid-term elections was a referendum passed in Nashville that says the local government cannot raise the current property tax rate without a vote of the people. The Metro Council can no longer set a new and higher tax rate to cover increases in its budget unless the new rate goes on the ballot and is approved by the voters.

The referendum got on the ballot due to the efforts of Tennessee Tax Revolt, which used the Internet, email lists and electronic petitions similar to the effort Knox County's Gary Sellers used to force a vote on County Mayor Mike Ragsdale's wheel tax increase. The Nashville referendum passed in every precinct but one. It was approved by Democrats, Republicans and independents; it passed in rich neighborhoods, in middle-class neighborhoods and in poor neighborhoods.

The city's establishment has been horrified at the prospect of this exercise in democracy. There have been scare stories about the effect on the city's bond rating. But given the 77 percent margin of victory, no politician has stepped forward to challenge the measure in court. Metro Council passed a property tax increase last year and is not expected to propose another one right away. It would be when another increase is proposed that the measure might wind up in court.

What is the horrendous property tax rate in Nashville? The urban tax rate is $4.69 cents per $100 valuation. The comparable rate in Knoxville (as a non-metro government, add city and county rates together) is $6.01.

It the Nashville charter amendment stands, expect this trend to have major repercussions all across the state - far beyond a candidate winning a U.S. Senate.

Here's a key early question for anyone running for Mayor of Nashville next year: If you are elected mayor and at some point as mayor you request Metro Council to raise the property tax rate, will you also file or support a lawsuit to overturn the charter amendment that was passed overwhelmingly by the people you were elected to serve?