Charting a Path for Our Two Largest Cities
BY JUSTIN OWEN
Tomorrow, Nashville will select a new mayor, and early next month, Memphis will do the same. While Beacon cannot and does not take a side in political elections, we do have a strong interest in the policy decisions that will be made going forward. Here’s what the next mayors of Nashville and Memphis should take the lead on as they take office:
Live within your means. Everyday families know the importance of budgeting. You make money, spend less than you bring in, and keep your debt low. Yet local governments often do the opposite. They spend far more than they bring in from tax revenue, and put the difference on the credit card for our children and grandchildren to pay, with interest. Nashville has racked up $2.2 billion in debt. That amounts to more than $3,300 that every man, woman, and child in the city owes. City leaders, from the mayor down, need to be responsible stewards of taxpayer money and ensure that we aren’t pushing unbearable obligations onto future generations.
Don’t overpromise and under-deliver. One of the biggest drivers of spending and debt is the politician’s empty promise. Local leaders frequently offer grandiose benefits to city workers in the form of pensions and healthcare. Yet they almost never fulfill those promises with funding. For example, one estimate shows that the Memphis city pension remains underfunded by $682 million. That’s money city leaders have promised workers in future benefits, but then refused to set aside. Failing to keep benefits in check and fully funded either means that city workers won’t get the benefits promised to them, or taxpayers will have to fork over extra money to make good on those promises. The incoming mayor owes it to both city workers and taxpayers to refrain from making promises on which he can’t deliver.
Look out for taxpayers, not special interests. Mayors love ribbon-cutting ceremonies, taking credit for creating jobs via massive handouts and tax breaks to large companies. But the reality is, companies will relocate to or expand in a city based on its business-friendliness, tax burdens, and regulatory environment. Corporate welfare is just the icing on the cake. But it’s some expensive icing for taxpayers. Nashville alone loses $17 million a year in tax revenue as a result of tax increment financing, or TIF. Through TIF, city leaders dole out loans to developers to build in so-called blighted or downtrodden areas of town. This is money that average taxpayers have no idea is being redirected away from basic city services. If you live in one of the newer condos in downtown Nashville, you may think your property taxes are helping fund education, police, fire, and roads. But you’d be wrong. As one downtown resident recently discovered, just $115 of her $2,600 in annual property taxes supports city services. The other 95% goes into the pockets of wealthy developers to build more buildings. Nashville can maintain meaningful growth without this elusive practice. It’s up to the next mayor to prove it.
The next Nashville and Memphis mayors can set an agenda of wise, fiscally responsible management. Or they can continue to rack up debt, empty promises, and special favors. We will see which direction our two major cities take in the years ahead.