Fiscal Accountability

Finance is the foundation of everything a city does. Sound fiscal management will allow us to get beyond this moment of financial stress. Better management of taxpayer money will free up resources for priorities like education and infrastructure.  

Metro has picked up some bad financial habits in recent years. The current course of deficit spending and selling assets for short-term operating funds is unsustainable. Metro’s revenue grew by over 19% between 2013 and 2018, yet education, transportation and affordable housing are still underfunded. Payments on our rising debt have limited the investments that can be made in education and affordable housing. But that has not stopped Metro from awarding incentives to developers instead of investing services that benefit residents. Metro needs a reset of priorities and leadership. Shared prosperity begins with fiscal sanity and people-centric growth.

I voted against a property tax hike last year and this year. It is a false choice that our only option is to approve Briley’s parking privatization plan or increase property taxes. There are other options. The city has other revenue sources than just the property tax.

As for parking privatization, I will not as mayor be sending that to council. I have been strongly opposed to it, and it requires future council action for it to happen. You can change the bad things in this mayor’s budget by changing the mayor.

The city needs to benefit more from tourism revenues. The number one thing I have heard on the campaign is the desire for the tourism space to cover its own costs and not impose them on the resident taxpayer. Tourism is an important part of our city’s economy and identity, but it is time for the tourist economy to stand on its own two feet. We can obtain additional revenue from tourism and development. Part of that revenue is from the surplus already being collected by other local government agencies such as the Convention Center Authority. It would be easy to raise property taxes, but there are other revenue sources that need to be utilized.

I’ve consistently favored the good management approach over a sizable property tax increase. Only a mayor can turn the page and usher in an era of good management, but the effort has already begun via Metro council action. One year ago, I led the formation of the Blue Ribbon Commission to identify targeted savings and revenue opportunities. The first year of the BRC was a partial success, but real support from the Mayor’s Office is crucial to realizing the potential of the process.

Here are some examples that illustrate our city’s misplaced priorities when it comes to managing Nashville’s money:

Omni Hotel

When the convention center was built, Metro handed out massive incentives to bring in a luxury hotel. Taxpayers footed the bill for the Omni by providing $61.56 million in tax increment financing (TIF), a 62.5% property tax abatement for 20 years, and $245.5 million in cash payments over 20 years. All-in, we paid Omni more than the hotel cost to build! The TIF loan was enough to cover Omni’s $26.5 million land cost back in 2010. The 62.5% property tax abatement was worth $2.28 million to Omni last year alone. Giving the abatement on top of TIF created an unusual circumstance in which the Omni development doesn’t pay back its own TIF loan. Property tax revenue from other properties has to cover the difference. It is worth pointing out that the Metro General Fund only receives 1/6th of total hotel taxes collected countywide. So in 2018, the General Fund saw $15.86 million in hotel tax. That same year, Omni received a $2.28 million tax break plus a $12 million cash payment.

 

More luxury hotel incentives:

The Westin Hotel received $14 million of tax increment financing in 2014.
The Thompson Hotel received $4 million of TIF in 2015.
The Dream Hotel received $6.5 million of TIF in 2016.
The Joseph Hotel received $4.5 million of TIF in 2018.

 

5th & Broadway

Fifth & Broadway, the site of our old convention center, was probably the most valuable piece of undeveloped property in the Southeastern United States. Yet in 2015, Metro sold the property to a developer for a mere $5 million due at closing plus $6.25 million over 25 years. The property’s true value was many times that. That additional money could have gone to affordable housing. Nashville taxes then paid to build a $34 million parking garage on the site for the developer. That’s not all our taxpayers paid for. In the fall of 2018, the developer received a $25 million tax increment financing loan via a tax-exempt bond from the Metro Development and Housing Authority. Private developers, not the public, were the winners.

 

Nashville Yards

In February 2019, a deal orchestrated by Mayor Briley passed through Metro council with only three votes in opposition. Metro agreed to give $15.2 million to the developers of Nashville Yards, the future home of Amazon. This agreement was in addition to the Amazon incentives. In effect, Metro is paying to help build a development and secure the tenant of a lifetime for the developer. Here is what I said at the time: “Once again, we are using taxpayer money to subsidize the wealthiest, and once again we don’t need to. We are handing subsidies out due to habit.”

 

Tourism taxes

The taxes collected for the Convention Center Authority will reach $136 million this year, for an annual surplus of $60 million. The Convention Center Authority will have an estimated unrestricted cash balance of $190 million. I began the process for recapturing some of this revenue to cover costs downtown, but more needs to be done. The Music City Center does not pay property taxes; perhaps it should before we raise residents’ property taxes.

 

Police Overtime for Private Events

Police officers logged 17,770 overtime hours during the NFL Draft weekend. As Channel 5 reported, MNPD spent more than $4 million on special events overtime through the end of April. That compares to less than one million dollars in all of 2006. Police overtime is a drain on Metro’s general fund and many officers don’t like mandatory overtime. Private events need to begin paying for their own costs.

 

Private development at Fairgrounds

At the same time Mayor Briley was patching a budget hole with ill-advised one-time property sales, his administration steered ten acres at the Fairgrounds into private hands. Briley awarded ten additional acres to the developer for mixed-use private development. Building the stadium itself should have been enough of an incentive for a soccer team. We should not have included a bonus of ten acres at the Fairgrounds beyond the incentive of the stadium. City hall has sold land with its right hand and awarded it away with its left.

 

Parking

The current mayor’s parking privatization proposal is not the first time Metro has made mistakes regarding parking. When Metro sold the Clement Landport, it received net $15,000 per space for hundreds of parking spaces in the Gulch. Meanwhile, Metro built parking spaces for private developments downtown for well over $45,000 per space.

 

Ben West Public Library

In 2017, Metro sold the historic Ben West Library building and only got $2 million. It is a historic 55,000 square foot building with parking. I was one of two votes against the sale. Here is what I said at the time: “I feel that we will regret selling this site for $2 million. It’s located across from what will be the amazing new federal courthouse and what will be a glamorous part of town. The city has had a string of valuable assets downtown — jewels in our crown — and each has been sold for too little. We have divested ourselves of these public jewels and we will wish that we had it back.”

 

Rolling Mill Hill land sale

Also in 2017, the Metro Development and Housing Agency sold 2.76 acres south of Broadway at the Rolling Mill Hill development. The developer paid MDHA $9.4 million, but the land was actually worth many millions more, perhaps double. MDHA also gave the developer a tax-increment financing payment of $7.9 million. Here is what I said at the time: “My concern is that Nashville gets the fair value of the assets that it owns. This is clearly an extremely valuable piece of property, and we need to get the fair value of it for taxpayers. In effect, we are giving away a piece of land for $1.5 million net.” Metro needs to begin doing business with the taxpayer in mind.

 

Opryland Waterpark

Metro gave Opryland Hotel an estimated $14 million incentive package to build a private waterpark in 2017. The arrangement froze property taxes for the Ryman facility. Nashville residents are only able to use the waterpark if they book a stay as a resort guest. Here is what I said at the time: “I express my own reluctance to let groups pay their fair share of property taxes, and we will fail as a community if you let that happen. Everytime that we need in the future something for our districts: a reading instructor for our children, a policeman, a body camera, or a stormwater drain, we will know where to find it — and you’ll find it in the Opryland swimming pool. And literally that is where it will be.”

 

Lifeway

As the Nashville Scene reported in 2016, Metro awarded a “$3.5 million package aimed at sweetening LifeWay’s plans to move their headquarters from one part of downtown to a different part of downtown.” I was the only vote in opposition. I said at the time that Nashville had become a swan and that Metro needed to raise our expectations for developers. “We have to expect a payback from it because we are depriving schools and children of the same money that could have gone to these other groups.”

 

Debt

Metro has issued or obligated itself to issue $2.6 billion in new general obligation bonds to cover spending, since 2015. The State of Tennessee only has $1.9 billion in total general obligation bonds outstanding. Our total issued and obligated general obligation debt is now about $4.5 billion. This is with the assumption that there will be no new capital spending in the years ahead. General obligation debt will be $6,500 per person in Davidson County – this is one of the highest per capita debt burdens in the country.

Our issued and obligated debt per capita has almost doubled since 2015, even accounting for our population growth. Metro deficits over the last three years are bigger proportionally than the Federal government’s during the same time frame. Metro’s deficit in 2018 was 15% larger than our entire sales tax collections. The increase in debt service payments since 2013 would essentially fund our entire police department.

 

My commitments

As mayor, I will put taxpayers first in negotiations. I will end the giveaway culture that is more focused on enriching a small elite than serving our entire city. I will re-evaluate the use of incentives so that they go to projects supporting community improvement rather than downtown development. I will provide robust support for the Blue Ribbon Commission to identify savings and revenue opportunities. We need to conduct performance audits of Metro departments and agencies to increase the transparency of how tax dollars are spent and identify areas for improvement. I also support creating an independent Metro Inspector General. This will be an independent office that will work with the independent Office of Internal Audit to identify and prevent fraud and waste across Metro government.

City leaders have been exceptionally creative with financing deals to help private developers, but that creativity and dedication is missing in action when it comes time to fund our schools, take care of our employees and create affordable housing.

Nashville’s taxpayers deserve a mayor who will stop this unsustainable cycle – a mayor who understands that tourism dollars should be going to improve the lives of residents, rather than residents’ dollars going to tourism. We need to reign in deficit spending because it hampers our ability to pay for essential services. I am running for mayor to provide sound financial management, recapture tourism revenues, end a culture of giveaways, and get our city’s finances back on track. With your help and support, we can create a city that works for everyone.

 

John Cooper

615-762-8856 (call or text)

campaign@johncooperfornashville.com