O'Connell calls for tax increase in $3.8B budget

Between the lines: Nashville leaders have raised property taxes just twice since 2005.

• The most recent increase was in 2020, when the rate went up 34%. Metro insiders expected an increase this year. A 2023 study concluded Nashville had one of the lowest tax rates among major cities in the nation.
• O'Connell's budget, including the tax increase, will likely garner enough support within the Metro Council to pass.

What he's saying: The mayor outlined his budget during Thursday's State of Metro speech at the downtown public library, while directly addressing protesters — including one dressed as a cow and another as the grim reaper — who lined the sidewalk outside.

• "Many of you undoubtedly walked past folks this morning who believe that property tax going up for any Nashvillian by any amount is unnecessary — just more government spending," he said. "These are the same people celebrating the chaos of federal cuts — which, make no mistake, are NOT about efficiency."
• "What they won't tell you is that what they're proposing means we wouldn't fund our schools, services and safety," O'Connell continued.

Context: The process of setting a tax rate is especially confusing during property appraisal cycles, which take place every four years.

• Assessor of Property Vivian Wilhoite's office concluded the median countywide increase was 45%. But that doesn't mean property taxes are going up 45%.
• The state requires appraisals to be revenue neutral for local governments. Under a process called equalization, the tax rate is therefore reduced by about 45%.

By the numbers: The current combined rate for urban and other areas is $3.254 per every $100 of assessed value. The equalized rate will be $2.222.

• O'Connell is proposing a rate of $2.814, which constitutes an increase of 26.64%.

• To figure out your tax bill, determine the assessed value of your home (25% of the total appraised value). Divide the assessed value by 100, and then multiply by the proposed tax rate of $2.814. Metro also has a tax calculator on its website.
• According to Zillow, the average Nashville home value is $436,048, which would lead to an annual bill of $3,068 under O'Connell's proposal. If there was no tax increase, the same bill would be $2,422.

Zoom out: Though his budget does not include many new big-spending items, he did commit additional funding for schools and housing.

• O'Connell proposed a 13% bump in schools' funding, primarily to pay for college and career readiness, tutoring and summer learning, mental health programs and school safety.
• He also committed $45 million to affordable housing initiatives outlined in the recently released Unified Housing Strategy.

The bottom line: "This is a basic, common-sense budget that follows a 2025 budget in which we asked each department to reduce spending," O'Connell said.

What's next: The council must vote to approve the budget before July 1.