Nashville budget proposal includes 26% tax rate adjustment amid federal funding uncertainties

The Metropolitan Council Committee on Budget and Finance convened on May 5, 2025, to discuss Nashville's proposed budget for the fiscal year 2026, focusing on property tax rates, revenue streams, and expenditures. A significant point of discussion was the proposed post-equalization property tax rate, which is currently set at 2.222 but is pending approval from the state board of equalization. The recommended tax levy for FY 2026 is 2.814, reflecting a 26.4% increase from the proposed rate, which aligns with inflation trends affecting the city.

The committee highlighted that Nashville's property tax rate remains the lowest it has been since 1972, and lower than those of other major Tennessee cities. This rate adjustment is part of a broader strategy to manage the city's growth and ensure adequate funding for essential services, as other revenue sources have not kept pace with inflation.

In terms of expenditures, the budget allocates 12% to debt service and 38% to education, with significant investments in public safety and health services. The proposed budget includes a $1.5 billion allocation for schools, marking a $132 million increase in operating funds. This investment aims to enhance educational resources, including security personnel and support staff, contributing to Nashville's recent educational achievements.

The budget also emphasizes public safety, with $15.3 million earmarked for the Nashville Fire Department and additional funding for the Metro Police Department, including new school resource officers. Furthermore, the budget outlines a $45 million investment in housing strategies and waste services to maintain reliable city services.

The committee plans to hold further budget hearings and discussions leading up to the final budget approval, which is due by June 30, 2025. The ongoing monitoring of federal grants and the establishment of budget sustainability funds were also noted as measures to address potential funding uncertainties.

Overall, the meeting underscored Nashville's commitment to balancing growth with fiscal responsibility, ensuring that essential services are adequately funded while maintaining a competitive tax rate.