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Metro Nashville’s budget is set at $3.22 billion this year, up more than 6 percent from the previous year. Finance officials, the mayor’s office, Metro councilmembers and labor and interest groups are currently preparing to debate the 2024-25 spending plan, set to go into effect July 1, with limited capacity to add new programs or increase employee pay.
Mayor Freddie O’Connell, elected late in 2023, is expected to submit his first budget proposal early next month. Then, the Metro Council will have a couple of months to debate the spending plan and make changes, all as public feedback is solicited around the county and in council chambers.
One of the most significant points of discussion will be revenues. Finance Director Kevin Crumbo expects no growth from the current year, signifying a normalization from the frenzied revenue growth experienced locally in recent years.
That means hard decisions have to be made, and the city’s employees and school system are among those angling for their piece of the pie.
“As we’re trying to incorporate the things that we care about, then there has to be funding for that, and some of that has to be offset in some type of way,” says Metro Councilmember At-Large Delishia Porterfield, who chairs the Budget and Finance Committee. “I don’t want to paint a picture of doom and gloom, because I don’t think it’s a doom-and-gloom situation. I’m very thankful that the numbers are stable, but obviously I do wish that there was more revenue.”
When asked whether funding priorities like education, affordable housing or employee pay — faced with flat revenues — meant cuts elsewhere, Porterfield says, “We do have to keep our eyes open, have some flexibility and look in multiple places to make sure that we have the funding that we need to take care of our obligations.”
Will the administration look for places to save money in the budget?
“Yes, for sure,” Crumbo says. “We’re going to look top to bottom at the Metro government.”
After an early recovery from the pandemic left the city flush, it is now transitioning into more normal spending patterns. A dwindling number of federal COVID cash infusions is among the factors leading to the projection of flat revenues in Nashville.
“There was a big boom in spending as people exited the pandemic and had some pent-up demand,” says David Simpson, senior policy analyst at the Sycamore Institute, a Tennessee-based public policy research center. “As we’re starting to get a more normal pattern of growth, I don’t think it’s unsurprising that the state and the city are being cautious about what’s happening in the upcoming year.”
One avenue for balancing a flat-revenue budget that does not seem to be on the table: a property-tax increase. Crumbo says he thinks it is “ideal” to look at property tax rate changes in the same year that the city goes through the reappraisal and equalization process.
“Somewhere along the way we started to get out of that cadence, and I think that’s made things a little challenging from a planning standpoint,” says Crumbo. “So I’ll be glad to see a return to that. I hope to see a return to that.”
The next reappraisal is next year, meaning O’Connell could face the prospect of asking voters for a sales tax increase to fund his transportation plan on the November ballot and then a property tax increase proposal a few months later.
Metropolitik: Modest scope, supportive polling and community contacts lay groundwork for O’Connell’s April 19 unveiling
Employee pay
The pay plan for Metro’s thousands of employees — including police officers and firefighters, librarians and maintenance workers — always represents a major source of discussion in the budget cycle.
Metro Human Resources officials told the city’s Civil Service Commission this week that they are recommending a 3.5 percent cost-of-living adjustment for most employees and 3 percent merit raises for qualifying employees. Last year, Metro employees saw a 6 percent cost-of-living adjustment and a 3 percent merit raise.
Those recommendations are already receiving pushback. Though inflation marks have receded somewhat, Metro employee advocates argue the 3.5 percent cost of living adjustment, as SEIU Local 205 President Jessica Stewart told the commission, is “not enough.” James Smallwood, president of the local chapter of the Fraternal Order of Police, echoes her concerns.
Metro HR is currently working on a major compensation study, but results will not be ready in time to influence this year’s budget cycle. Shannon Hall, director of Metro HR, told the commission that the city is still keeping employees’ compensation ahead of inflation if you look at a 10-year average.
“It doesn’t reflect the true cost of living in Nashville,” Stewart said. “I understand the desire to do an average, but our employees live in today’s Nashville. They don’t live in the Nashville of 10 years ago. We feel a 5 percent [cost of living adjustment] would be better. We are hoping we can meet and confer with the administration to come to some common ground.”
One hiccup in the process was news earlier this year that the living wage calculator used to peg minimum hourly Metro salaries showed the living wage for Nashville jumping to more than $23 per hour this year, up more than $5 from the year prior, and double the rate from five years ago. Using a rolling three-year average, Metro HR is recommending an increase in the minimum hourly wage to $20 — less than the calculator’s figure for this year but something commissioner Ethan Link, a labor representative, calls “excellent news for our lowest-paid, hardest-working members of our workforce.” Another priority is making sure Nashville has the highest pay in the state for entry-level police trainees.
Hall and commission chair William Farmer insisted that the administration’s projected flat revenues had nothing to do with employee pay recommendations.
“They do not have inputs into our recommendations on the pay plan,” Hall said. “[The Department of] Finance does not influence, nor does revenue influence, what we recommend.”
Added Farmer: “Our job is not to balance the city’s budget. It’s just not. Our job is to ensure the employees are fairly paid. If they can’t find the money, that’s on them. If they have to raise taxes, that’s on them.”
But Crumbo says he “would not characterize it as ‘no collaboration’” and that he and Hall “speak almost every day.”
“Just because they have an ask doesn’t mean that we will be able to meet that ask, but rather we have to balance that with all the asks that we get,” Crumbo says.
Porterfield describes funding employee pay adjustments as an obligation in the budget, like other fixed costs.
“They’re the ones that make our city run," she says. "They’re the ones that are doing the hard work. We need the COLAs to keep up with inflation. To me, that’s the bare minimum, is keeping up with inflation.”
Schools
The Metro Nashville Public School Board this week approved a budget ask, after a more in-depth discussion about the proposal in March. The current year’s school “continuity of operations” budget is $1.21 billion, a 9 percent (or nearly $100 million) increase over the year prior. For the coming fiscal year, the board and school administrators are proposing a $1.27 billion “continuity of operations” budget, a 5.2 percent (or nearly $63 million) increase from the current year. The school system is waiting on guidance from the mayor regarding the scale of a cost-of-living adjustment for employees.
In addition to employee pay, a top priority for the school system is continuity of programs originally funded by federal COVID dollars, which expire this year.
Nurses in every school, elementary school safety ambassadors, weekend and summer high-dosage tutoring programs and no-cost meals are among the programs partially funded by federal relief funds. MNPS Director of Schools Adrienne Battle told the board in March that the school system has been working on moving funding for those programs into the regular operating budget.
“We have a funding bridge, not a cliff,” she said.
Porterfield says she supported funding the programs initially supported by the federal dollars.
“I think it’s really, really important that we’re making the necessary investments in our public schools,” she says. “That is one of the best investments we can make as a city, and it it pays off.”
Feedback
Nashvillians have already had one public opportunity to weigh in on next year’s budget, at a public hearing in February.
A series of residents asked for a variety of budget items, ranging from more accessible equipment in parks and community centers to complete sidewalk networks to affordable housing and alternatives to policing.
Porterfield says she is planning public budget meetings in different parts of the county. The Metro Council will hold its own budget hearings after the mayor’s budget is presented, and residents will have another chance to weigh in at the main budget public hearing in June. She also recommends residents email their district or at-large councilmembers.
Nothing is final, with the Civil Service Commission still yet to vote on a proposed pay plan, and the mayor yet to file a budget, and the Metro Council yet to amend it.
“Be engaged if you want to see something in the budget, or if you don’t want to see something in the budget,” Porterfield says. “I want to hear from people. We want to hear from people.”
