Live from Music Row Tuesday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Tennessee State Senator Kerry Roberts in the studio.
At the end of the third hour, Leahy and Roberts discussed how the Tennessee State Comptroller’s office may need to step in as Metro Nashville’s un-balanced budget yields a 32 percent property tax increase and an increase in spending. The men agreed that this would not be an ideal situation for the city or comptroller.
Leahy: I am in the studio with State Senator Kerry Roberts. Kerry, you brought to my attention Justin Wilson the comptroller of the state has sent a letter to the Vice-Mayor Jim Shulman and Bob Mendes. Why did it go to the vice-mayor and not the mayor?
Roberts: Probably because he’s chair of the finance committee. I’m not exactly sure the way they are structured. It was a very significant letter from the beloved as we call him.
Leahy: By the way, Justin Wilson. Top guy.
Roberts: Yes. Yes.
Leahy: He is a solid straight arrow.
Roberts: Yes. Anybody that can show up in the Easter Bunny suit and pull it off. (Leahy chuckles) We love the guy. No kidding. He’s beloved. That’s what we call him. He’s a great comptroller, does a fantastic job for the state of Tennessee.
And he points out that Metro’s done something that’s kind of tough by holding on to a double-A long term rating on to their obligation bonds and their obligations that are supported by non-tax revenues. That’s tough considering the circumstances, however, their outlook has moved from stable to negative. And so what comptroller Wilson says is…
Leahy: Warning signs.
Roberts: Yes. You got to do two things with this budget. You’ve got to do two things. It’s got to be balanced. It’s got to be structurally balanced and you’ve got to improve your reserves. Your reserves need to be basically five percent operating balance. And if you don’t do that it’s going to be bad. And bad means the state is basically going to have to take you over.
Leahy: Let me read from his letter to the vice mayor and Bob Mendes chairman of the budget committee. The failure to meet operating fund balance policy minimums could have catastrophic consequences. Inadequate reserves would at a minimum result in the impoundment of funds by the Metro Finance Director. More seriously a budget that is not balanced or fails to meet Metro’s legal obligations will result in disapproval of the budget and unless corrected would result in a takeover by the comptroller’s office of Metro’s finances.
Roberts: Dash, nobody wants that to happen. Which is the last part of it.
Leahy: Hold on. Hold on. I’m glad you added that dash. Nobody wants that to happen. I don’t think that’s actually correct. (Roberts laughs)
Roberts: Probably some people do yes. Nobody in the comptroller’s office wants it to happen.
Leahy: Nobody in the comptroller’s office wants it to happen. If you really want to improve the finances of the city, now this Kevin Crumbo is a pretty strong guy but it’s the mayor and the Metro Council calling the shots, and the shots are basically spending money like drunken sailors and raising taxes.
Roberts: Right right. So people take a letter than and wave it around and say, see it proves my point. (Leahy laughs) The pro-mayor property tax increase people see the comptroller has said we have to have a balanced budget and the only way we can do that is with a 32 percent tax increase.
Leahy: That’s one way to do it. Cutting expenses instead of raising the five percent would be another way.
Roberts: It would be another way. The point is people say what does the comptroller have to do with this anyway? You have to remember that our counties are a creation of the Tennessee General Assembly.
Leahy: In our federalist form of government under the Constitution, there is a national government and there are state governments. And that’s it!
Roberts: So our local governments are a creation of the state so these budgets have to be approved by the comptroller’s office. If they are not the comptroller, it has the right to take over their budget. Logistically it’s not an easy thing to do but it has been done before in circumstances. It could be done again. Let’s hope that they get it right. We’ll see what happens. It has to be approved by the end of this month. So we’ll see.
Leahy: I don’t think Comptroller Justin Wilson wants to take over the finances of Nashville. But, the Metro Council may force him to do that. I’m not convinced that raising property taxes 32% while increasing spending at five percent is ultimately going to solve the problem.
Roberts: That’s what is going to get a lot of people. If you are having to increase property taxes while cutting spending I think you get a little more buy-in from the taxpayer. Because that is a dire situation. When you are increasing spending that’s a nonstarter for a lot of people.
Leahy: And the curveball here for all of these plans is this, nashvilletaxpayerprotectionact.com. If Jim Roberts gets enough signatures for that to appear on the ballot as a separate item for an up or down vote in December. I think voters would reject a 32 percent property tax increase then.
Roberts: What is it again?
Leahy: nashvilletaxpayerprotectionact.com. The point is that Jim Roberts is going to have enough signatures I think. It will be on the ballot and my guess is the voters will say we don’t want to raise property taxes by 32 percent.
Roberts: I will add that if people are going to download the petition and go get signatures if you don’t have people register in your jurisdiction their name is not going to count.
Leahy: It has to be Davidson County.
Roberts: It has to be Davidson County. And if you don’t do that it’s not going to count.
Leahy: So predictions, when we meet here next week on Tuesday you are in the studio again, will the Tennessee General Assembly still be in session?
Roberts: I think that probably a week from today, my guess, and I don’t have any inside information, I think one week from today could possibly be our last day.
Leahy: Well we’ll see. Notice, possibly. This is a man who (Roberts chuckles) has been in the political arena for some time. Every statement must have a qualifier and this is a wise qualifier.
Roberts: Or I could say I really don’t have any idea and I’m playing pin the tail on the donkey but you asked me for a date and I gave you one.
Leahy: If I look at this, I understand what the House is doing. They want to generate activity.
Roberts: I don’t blame them a bit.
Leahy: But I also understand the Senate.
Roberts: I see both sides. I really do. My beef is that I want us to be there when the public is there. That’s my pet peeve.
Leahy: What I think is going to happen is, and you have more insights than I do, I think they’ll just pass the budget. There will be very little else that passes. Two weeks from today for sure the Tennessee General Assembly will have adjourned. That’s what I think.
Roberts: I agree. Necessary for the budget. COVID-19 related. Necessary for the reign of government. Those are the three categories of bills that are going to pass.
Leahy: As always, State Senator Kerry Roberts, a delight having you in the studio. We are just having too much fun.
Roberts: I enjoyed it. Let’s do it again next week. Same time, same place.
Listen to the full third hour here:
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