Taxes Going Down? Well, Kinda.
Taxes Going Down? Well, Kinda.

Mayor John Cooper set tongues wagging when he showed up on a morning news show Friday and promised “the largest property tax rate reduction ever.”

That announcement follows the decision by the mayor and Metro Council to increase rates by more than 30 percent as COVID-19 shut down schools and businesses and threatened to punch a hole in the city’s annual revenues.

But the promised reversion to pre-pandemic rates — the type of decision typically announced during a State of Metro address, not on a random news show — is not exactly what it seems, which some Metro Councilmembers were quick to point out.

The city is currently in the middle of its required quadrennial property reassessment, and state law prohibits cities from making money on a reassessment. So, when property values go up, as they have in Nashville over the past four years, property tax rates must decrease to the point where the city is not bringing in any additional money due to the reappraisal.

That doesn’t mean everyone will pay less in property taxes. In fact, in a revenue-neutral reappraisal, about half of homeowners would pay more (with the other half or so paying less, to equal no additional money brought in).

Historically, the mayor and the Metro Council have decided to separately increase rates to coincide with the reappraisal’s forced rate reduction in order to capture additional revenue. That did not happen four years ago. And Cooper is not pledging not to do that this year — he's just saying that rates will go back to about what they were before 2020, even if that is greater than what the reappraisal reduction calls for.

“Reappraisal numbers are going to be strongly up, and that’s going to allow us to cut the property tax rate down,” Cooper said.

Metro Councilmember Bob Mendes, a former Budget and Finance chair who pushed for rate increases prior to the pandemic, is one of the lawmakers pushing back on Cooper’s framing.

“Property values go up, tax rate goes down a proportionate amount & city revenue stays the same. Always,” he wrote on Twitter. “Taking credit for this is nonsense.”

“Often, over the decades, Metro increased taxes in the same year as a reassessment,” Mendes added. “When this has happened — reassessment pushes the rate down automatically & then Metro nudges it up. In these years, the appearance was an overall tax RATE reduction even though TAXES PAID went up.”

The Metro budget debate will kick into high gear in the coming weeks, with a spending plan likely approved in June.

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