Monday, November 22, 2010

Is County the New City Where Taxes Are Concerned?

Posted By on Mon, Nov 22, 2010 at 7:37 AM

Whether city taxpayers are footing the bill for suburban communities to piggyback on their services is an argument that never goes away. It rises again in Charles Maldonado's story in the CP today about the roots and fruit of Metro Nashville's two-tiered tax-and-service system — a system that may be antiquated as clear divisions between the city and outlying communities disappear.

Deep in the story, you'll find two nuggets about how the city's Urban Services District — or USD, which pays a slightly higher tax rate for city services such as increased police presence, garbage/recycling and sewers — affected (and continues to affect) development issues very much of the moment:

USD expansion could explain, in part, why in 1975 a newly formed business interest called Hickory Hollow Mall Inc. began work on a shopping center precisely where it did — the far southeastern edge of a 1973 USD annexation, surrounded on three sides by what Metro government then categorized as non-urban land. (A tiny tract of land south of Bell Road, which now includes several mall-adjacent shopping centers, was annexed in 1981. Most of the rest of Antioch and the area around Nashville International Airport were later included in 1988.)

In a more recent example, the developers of May Town Center, the $4 billion multi-use complex that had been planned for Bells Bend, had applied for the land to be annexed into the USD. The Metro Planning Commission, in its June 2009 analysis of May Town, insisted that the application for USD status be included in the plan. (Note that USD status would have boosted May Town’s property tax rates from $4.04 to $4.69 per $100 of value and, once the project was completed, would create more than $46 million (2009 dollars) in annual revenue, according to a report by the University of Tennessee’s Center for Business and Economic Research.)

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