Dissecting Mayor Cooper’s FY 22 Budget

May 21, 2021//Budget, Financial, Property Taxes

Last Saturday, I kickstarted this year’s Budget Conversation series with help from Councilmember at Large Bob Mendes. Because it was our first conversation about the FY 22 budget, we stuck to explaining what is outlined in Mayor Cooper’s proposed budget, not what should be included. Below is a summary of our conversations.

Highlights from the Mayor’s Budget

GENERAL OVERVIEW OF THE BUDGET:

Without a doubt, the past year has been extremely challenging to navigate for all of us. That being said, Mayor Cooper’s FY 22 budget aims to strengthen the stability of Nashville’s financial situation and rebalance the distribution of your tax dollars. Stability means that we finally find ourselves in a position of choice. Now we can talk about appropriate policy options and investment opportunities rather than look for ways to keep ourselves afloat. The mayor described this year’s budget as an investment budget. So, what does this mean?

INCREASED FUNDING BY DEPARTMENT

Schools: For the first time in many years, the mayor’s FY22 budget is fully funding MNPS. This is an $81 million increase from last year’s budget aimed mostly at improving teachers’ compensation, especially for mid-career educators.
Main Metro Government (fire, police, garbage, codes, etc.): $32 million used to improve the pay plan for non-school employees.
Affordable Housing: $2.5 million dollar increase to the Barnes Funds spending (from $10 to $12.5 million) with additional federal aid to create an overall increase of $37 million.
Police: $16 million increase (from $210 to $226 million) in an effort to staff a new precinct in Southeast Nashville.
Transit: $25 million increase to return us to a normal level after federal funds allowed the budget to relax last year (+$1 million to fund technology improvements on the commuter rail).
Livability: Increases in parks (+ $4 million) and arts (+ $0.5 million).

OTHER HIGHLIGHTS:

$52 million in real, organic budget growth
As projected for June 30, we will have $314 million in savings (this is still below the $400 million in fund balance/savings that the Government Finance Officers Association would recommend, but it is still an improvement)
Debt service (the amount that a city pays for debt) is finally decreasing for the first time since 2015 and rests at 13.6% this year (which is in the “safe” range of 8%-15%)
A 7.3% increase in potential spending dollars (now $2.65 billion)

To access information on the budget google “Metro Finance Citizens Budget” or follow this LINK.

WHAT IS THE MAYOR’S PROPOSED TAX RATE?

If you live in the Urban Services District, the proposed tax rate is $3.288 while the proposed tax rate for the General Service District is 2.953, subject to council’s approval. It is important to note that while the proposed rate is down from last year, some property owners may still pay higher taxes. You can calculate the amount of property taxes you will be paying based on the proposed rate here. For additional information, please refer to my last year’s blog on property taxes or read CM Mendes’ blog posts on his website MendesforNashville

The mayor’s budget with the proposed rate is now before the council, with public hearing and second reading on June 1st. Council still has time to make adjustments to the budget and vote on the final rate no later than June 30. You can access the FY 22 Budget calendar here.

QUESTIONS????

How does the MNPS budget request compare to what is in Mayor Cooper’s budget?

Mayor Cooper’s budget matches the request brought forth by MNPS. In many cases, departments will only ask for what they know will be granted, but in this case, it is a big ask and Mayor Cooper is proposing we fill it.

What is the financial implication to repeal the property tax increase to the 2022 Budget?

If the referendum is found to be legal for the current fiscal year, it will take 40 million dollars out of our budget, which is most likely to take away teachers’ pay raise and/or kill the new police precinct.

What is the impact of the Federal American Rescue Plan on the budget?

Unfortunately, the second round of COVID relief dollars cannot be spent on anything outlined in the operating budget. Therefore, we must be extremely thoughtful about where that $267 million dollar sum is funneled over the next 3 years. Council members must explicitly define a process through which to allocate these funds, preferably through transparent, diverse public meetings like we held last year.

If you miss last week Budget Conversation with CM Bob Mendes, you can watch the entire episode at the link below.

NEXT BUDGET CONVERSATION

Same as last year, this year’s budget conversation will be every Saturday at 3pm on Facebook until June 30th. My next conversation will be tomorrow, Saturday May 22 at 3pm. My first guest this week is Assessor of property – Hon. Vivian Wilhoite. She will be discussing the reappraisal process and how to appeal your appraisals. My second guest, Jason Freeman, is the Political Director of SEIU- Local 205. Jason will be discussing the referendum and its impact on the budget, services taxes, etc. Please join us on Facebook live with your comments and questions at https://www.facebook.com/ZulfatSuaraforCouncil/

As always, I am open to questions, suggestions, and critique. I look forward to discussing the budget with you in more detail over the next few weeks.