Forbes.com, which caters to millions of readers worldwide, has just reported on and explained Nashville’s financial woes.
In a recently-published article, Tennessee-based businessman Tim Pagliara wrote about state Comptroller Justin Wilson’s displeasure with Metro Nashville’s finances and the threat of the city potentially falling into a receivership.
“Back in October, a month after taking office, Mayor (John) Cooper talked to The Wall Street Journal about his mandate to pull the city’s economy back from the brink by (among other things) curbing financial incentives and relocation deals to corporations. After the prior administration had awarded $167,000,000 in economic incentives in exchange for 13,000 new jobs and $1.2 billion in capital investments, the city could not balance the budget without selling assets like the Nashville Thermal Plant. Which, IMHO, is like selling your living room furniture to pay your electric bill. Tennessee has a unique set of checks and balances. State law mandates a balanced budget,” Pagliara wrote.
“In preparing this piece, I looked at recent articles about the increased flight of people and companies from NYC. Some surveys show that over 30 percent of the New Yorkers are considering moving out of state because of the high cost of living, complexity of life, and deteriorating infrastructure.”
Pagliara then went on to describe how the Tennessee State Office of Economic Development welcomed Amazon and the relocation of Alliance Bernstein’s Corporate Headquarters from New York City to Nashville.
“Yet, despite the budgetary shortfalls, Amazon and Alliance Bernstein were paid over $20,000 per employee for so-called relocation expenses. Why so much? And why, in the case of Alliance Bernstein, was this amount so much greater than what their counterparts, Goldman Sachs, JP Morgan, and Deutsche Bank, received to relocate to other cities?” Pagliara asked.
“After the people of New York rejected the deal with Amazon (it can be done), the company quietly expanded its growth plans elsewhere. And while Governor Andrew Cuomo lamented the loss of $27 billion dollars in tax revenue, he’d do well to heed the musings of Mayor Cooper: ‘With all these cranes in the sky, how did we run out of money?’ There are many reasons why the city ignored the realities of unsustainable growth. For several years, revenues grew at 32 percent while expenses grew at 38 percent. No one wanted to confront the reality of having to raise property taxes 16 percent to pay for the incentives that had been provided to companies like Amazon and Alliance Bernstein. Longtime residents were already mad enough about the horrific traffic problem. Asking them to pay out of pocket to make up for the political classes’ budgetary mistakes would add insult to injury. Then, State Comptroller Wilson finally put his foot down. Now the City Finance Director and Mayor will have to figure out how to continue to close the gap – and their constituents will bear the brunt.”
As The Tennessee Star reported this month, Metro Finance Director Kevin Crumbo said Wilson wants the following three things out of the city:
• A structurally balanced budget for the current fiscal year that is scheduled to end June 30
• A comprehensive cash management policy for all of Nashville
• Metro Nashville ‘s audited comprehensive annual financial reports and single audit reports by the end of December of each year.
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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
That is bad and should serve as a warning for Knoxville. How similar is Knoxville’s fiscal situation?
I continue to believe that my $1,500 property tax cut in 37215, following a $150,000 increase in appraised value, has something to do with this nonsense. It’s not right that me, and every neighbor I check at the property tax site, is getting a big tax cut – while our first responders and teachers are under ever increasing stress, and getting ever more difficult to replace. Then, there are the endless potholes…
This is state law. It’s not a tax cut, it’s a tax adjustment. Your taxes do not automatically rise with a new assessment in TN. That way we avoid what happened in CA. IF your taxes are going to rise, they have to be voted on by the local council.
Nashville voters brought this on themselves. The next time there is a downturn in the economy as there always is, Nashville crash and burn like the Hindenburg!
i find it telling instead of saying they would cut spending and avoid waste instead they would hate raising taxes. a politician’s true mind shows that the first two weren’t even thought of while the third raising taxes were their first and last thought to get the city budget in order. maybe if they would elect say someone like Trump a non-politician then they may have a chance to have a cut in city wide spending. remember a professional politician is just someone wanting to get rich on the tax payer dollar and with a reduction of services with a raise in taxes to the voters.
All of the “leaders” have been so enamored with being the “it” city they dumped all fiscal reasoning in exchange for a failing moment of glory. Just look at all of the previous “it” cities like Atlanta, Houston, New Orleans, etc. Do you really want to go down that path?
nashville has gotten too big for its britches and is about to be humbled. Maybe all of these nuts will stop moving here, hope so, maybe some will move somewhere else. Please!
I hope the previous post isn’t “actually” from Megan Berry. Didn’t all this fiscal stupidity begin on her watch? It didn’t happen under Mayor Cooper, as he just took over and had all of this dumped in his lap.
Well, not really. The fiscal lunacy has been going on for some time. Karl Dean wasted money on “art” instead of fixing infrastructure, AND, he inked the deal on the Music City Center which keeps most of the money it brings in instead of going to what the City really needs. AND, Cooper, while a Councilman, was complicit with these and other “deals”, that have financially strapped the city.
We’ll see how he “fixes” the problems, now that the music has stopped and he’s the one looking for that last remaining chair.
It matters who governs. Huge increase in revenue offset buy an even larger increase in spending, what could possibly be wrong with that? Show them all the door.
We will meet this crisis with an overwhelming show of love.
Yeah ya will…it’ll be like playing the board game clue…”it was in the cemetery, with the bodyguard”, or, “it was with the Mayor’s Office, with the City Councilman”.
What an idiot.