Tea Party activist Ben Cunningham is leading an effort for a 2018 referendum that would limit Metro Nashville’s debt level, setting up a possible clash with regional plans for a $6 billion transit project.
His proposed amendment to the Metro Nashville charter, the Nashville Debt Limit Charter Amendment, would also require Metro government to set aside money for the future payment of benefits for retired Metro employees.
“The Metro Nashville Charter is the primary governing document for Metro Nashville Government. The charter may be amended by (1)the Metro Council voting to place a charter amendment on the ballot or (2) the citizens may propose an amendment by petition,” the site says.
The petition itself, also found on the site, says “The undersigned residents and qualified voters of Davidson County, Tennessee, do hereby propose the following amendment to the Metropolitan Charter to be voted on by the people at the first appropriate county-wide election occurring after August 6, 2017 as selected by the Davidson County Election Commission.”
“If we submit the petition after August 6, 2018, we will probably need 6,000 to 8,000 signatures to get the charter amendment on the November 2018 ballot,” Cunningham told The Tennessee Star.
There’s already a provision on the books limiting debt to 15 percent of total assessed value of taxable property. But it pertains to Nashville’s old city limits, not the boundaries under combined city-county government, which makes it meaningless, Cunningham told The Star.
Moody downgraded Metro Nashville’s debt rating in 2014, saying it had an “above average debt burden.”
Critics say the proposed amendment would hamper the city’s ability to manage growth. Cunningham, who lives in Sumner County, has also been taking heat for supposedly meddling in the affairs of a county that he does not call home. But Cunningham, who used to live in Davidson County, says he has long represented the interests of taxpayers beyond his home turf. He told The Star that his critics’ claims are rooted in differences in ideology.
“If I were coming into Davidson County for union organizing, Megan Barry would probably have me in for a photo op,” he said.
Barry, Nashville’s Democratic mayor, is a champion of the $6 billion regional transit proposal, designed to be phased in over 25 years. She has praised passage of Gov. Haslam’s IMPROVE Act, which raises the gas tax by 6 cents per gallon (a 28 percent increase) and the diesel tax by 10 cents per gallon (a 55 percent increase) to fund road improvements, and allows municipalities to hold referendums on raising local taxes for transit. Barry said Wednesday in her State of Metro address that she plans to have a referendum on the ballot in 2018.
The transit proposal calls for light rail along several major corridors as well as rapid buses. Barry said Wednesday that work on light rail along Gallatin Pike couldn’t wait and would begin immediately.
Cunningham says more debt is likely to be incurred with the mass transit project and believes there are alternatives to addressing traffic issues. Metro Nashville and other areas could do more to encourage carpooling and working from home and major corporations could stagger their office hours, he says.
“There are lots of ways to improve traffic,” he said.
But the mass transit project is not Cunningham’s only concern and is not the only thing fueling his referendum drive. Metro Nashville has become comfortable with large-scale projects like the Music City Center and Nissan Stadium and running up the debt to help pay for it all, he says.
Currently, the total assessed value of taxable property in Davidson County is $20 billion. Fifteen percent would be $3 billion. Total debt now totals $3.1 billion, but the current year re-appraisal will significantly increase the total assessed value, meaning the debt limit under the proposed amendment would be greater than the current debt, Cunningham says.
Cunningham also regards the second portion of his proposed amendment as vitally important. It would require Metro to create a trust fund to start funding future employee benefits known as Other Post Employment Benefits. OPEB benefits are those other than pensions that state and local governments pay to their retirees. They can include life insurance and health care premiums, deferred-compensation arrangements, disability, legal and other services.
Metro Nashville’s current unfunded liability for OPEB benefits is $2.7 billion. The amendment would require Metro to fund the trust fund at the rate of 2 percent of the unfunded liability per year. A news article once referred to Metro’s unfunded OPEB liability as “a financial hurricane,” Cunningham says, noting that 36 local governments and entities in Tennessee already have trust funds.
In 2006, Cunningham collected enough signatures to place an amendment on the ballot to freeze property tax rates and allow an increase only if approved by voters in a referendum. The amendment passed overwhelmingly with 77 percent of the vote and was passed by a majority in all precincts. Davidson County is the only county in Tennessee with such a provision.