Nashville leaders ponder switch to every-other-year property reappraisals

State of play: The property reappraisal process, led by Assessor of Property Vivian Wilhoite, is underway. Wilhoite's team will soon reveal how much property values have gone up since 2021.

Driving the news: State comptroller Jason Mumpower has been stumping for counties to conduct more frequent reappraisals, and several governments have taken his advice.

• Knox, Sullivan, Blount and Hardeman counties are among those that have decided to hold appraisals more often.
• "More frequent revaluation is a modern approach that ensures a fair and equitable system for all taxpayers," Mumpower said in a statement to Axios.
• "Taxpayers will be confident in a system that is more predictable and accurate. Local governments will also have a more predictable revenue stream that isn't subject to adjustments created by the sales ratio."

What they're saying: Former city finance director Kevin Crumbo, who championed the every-other-year appraisal, tells Axios he agrees with Mumpower's analysis. He said more frequent appraisals would "take the guesswork" out of projecting a budget several years in advance.

• "The mayor is still reviewing this potential change, and he has worked closely with property assessor Wilhoite to gauge its viability," O'Connell spokesperson Alex Apple tells Axios.

Reality check: Wilhoite's office would probably need more staff in order to appraise properties twice as often.

• Metro Council would have to sign off on the switch, as would the state. Wilhoite, who's in the thick of reappraisals, declined to comment.

How it works: State law prohibits governments from making a windfall from the appraisal process. That means after Wilhoite's appraisals are released, the city's property tax rate will be reduced by the same percentage.

• As a generic example, if the average property increase across the county over the last four years was 40%, then the tax rate will be reduced by 40%.
• Yes, but: Once the appraisal process has ended, Metro leaders can — and often have done, historically — use the higher property values determined by the appraisal as grounds to dial the property tax rate back up.

Flashback: Nashville has rarely raised its property taxes this century. For generations, Nashville mayors used the reappraisal year as an opportunity to take a broad view of the city's finances and to pitch property tax increases.

• The last time Metro passed a tax increase during an appraisal year was 2005, when then-Mayor Bill Purcell and the council approved a rate hike. The pattern was interrupted when Mayor Karl Dean, dealing with a historic recession and the 2010 flood, didn't raise taxes during his first term.
• Under Dean, Metro increased the rate in 2012.

During the tumultuous next mayoral term, which included the resignation of Mayor Megan Barry, the rate was never raised.

• Stakeholders said the failure to raise taxes sooner put Metro in a financial bind. That led to the largest property tax increase in city history of 34% in 2020 during the early months of the pandemic.
• City finance experts say conducting appraisals every other year would allow for smaller, more manageable single-digit rate increases that don't give homeowners massive sticker shock.

What we're watching: The expectation is that O'Connell will propose a property tax increase as part of his budget.

• That's an unappetizing reality for a mayor whose transportation referendum, which was widely approved by voters, just raised the city's sales tax rate.
• O'Connell told the Tennessean this month that he isn't planning a flashy, big-spending budget.
• City leaders are having to grapple with increasing local revenues in response to steep federal cuts by the Trump administration.