June 8, 2005

The Battle for Nashville

The leadership of the Nashville Area Chamber of Commerce - some of whom don't even live -Davidson County - want the Nashville Metro Council to raise taxes on people who DO live . These people have other ideas. You can guess who I'm rooting for.

Nashville raises the property tax every four years like clockwork, the kind of cycle, unfortunately, that if left unchecked will cause Nashville to become blighted even while its suburbs thrive. Cities price themselves out of the competition for people and jobs.

I don't live anymore, but I did from 1988 through 2001. Nashville is now on the same wrong-headed path of other larger cities - thinking that government can solve a city's problems if it just takes more of its residents' money.

It won't work. Raising property taxes and sales taxes will just send more middle-class people to live and shop in the suburbs, leaving behind a city with a large lower middle class and poor population and a few enclaves of the very wealthy.

That's a recipe for a shrinking tax base and rising demand for government-funded services. Eventually, taxes won't be enough to pay for all the services the lower income population needs, so the city fathers will raise taxes again, fueling yet another round of exodus to the suburbs, eventually hollowing out the tax base.

And when the people move to the 'burbs, the employers eventually follow.

Population growth stats show a net migration out of Nashville in recent years, while the entire Nashville area has been in a population boom. There's a reason for that - and it isn't a lack of land to develop new subdivisions within the Nashville city limits. The city, with 535 square miles, is one of the largest cities in the nation in terms of land, and a quarter of it is completely undeveloped.

There's a reason that the population growth is ocurring in the "donut" counties. They offer better schools - Nashville's are mostly Grade A Lousy - lower crime and lower taxes, along with faster-rising property values. And where the people are moving, the jobs and employers are following.

It won't be too many years from now that the largest "downtown" for office space and number of workers isn't downtown Nashville anymore but the Brentwood/CoolSprings area. And most of those employees will live in the 'burbs, not the city.

I hope Nashville one day elects a fiscally conservative government that recognizes the city can't win by pricing itself out of the competition.

As Jimmy Hogan writes at SaveNashville.org:

We can choose to live somewhere that's unfriendly to homeowners or we can drive another 10 minutes down I65 toward Franklin where they are friendly to homeowners and sensitive to our home values and thus our 'wealth flight' will leave Nashville another corpse of a city with an eroded tax base. Interestingly Nashville is even in a more precarious position than Memphis because, as a Metro government already, there will be nothing left for predatory annexation as the tax base flees.

UPDATE: More here and here from Blake Wylie on Nashville's looming tax increase, including lots of photoblogging.