Nashville Mayor John Cooper’s proposed budget for the 2023 fiscal year would cost $2.97 billion, Metro finance officials say.
Cooper proposed the budget to the Metro Council during his State of Metro address last week, touting it as a “budget for full recovery.”
The budget reflects a 12.1% spending increase over fiscal year 2022, relying on already-realized increased revenues. Metro revenues come primarily from property taxes, local sales tax and other grants. Property taxes make up 54.1% of Metro revenue.
What will Metro spend more on?
Cooper’s budget includes a record $91.2 million funding increase for Metro Nashville Public Schools. Of that, $31 million would fund a 4% cost-of-living increase and step increases for MNPS employees, and $10.4 million would fund pay increases for bus drivers, cafeteria workers and support staff. The budget includes $4.7 million to fund paid family leave for all MNPS employees.
An additional $3.6 million in new spending would go to the Nashville Public Library, providing a more than 10% increase in funding over last year. Of that, $1.4 million would fund an expansion of summer programming.
The budget proposal also includes pay increases for all Metro employees, who would get a 4% cost-of-living adjustment and a 3% average merit increase. Funding is also included to provide an $18 per hour minimum wage for full-time Metro positions.
An additional $13 million would go to the Nashville Department of Transportation and Multimodal Infrastructure, reflecting a 44% increase in its funding from the last fiscal year. The new department was formed last year from the former Public Works department. WeGo transit would get a $10 million increase from last year, making up for the use of some federal relief dollars.
Cooper proposes a $19.3 million increase in funding — an 8.5% increase over last year — for the Metro Nashville Police Department, and an additional $500,000 to fund the Community Oversight Board, a 33% increase. In total, the budget would fund an additional 157 new emergency response positions, including police officers, firefighters, EMS personnel and 911 dispatchers.
Included in the budget is a $50 million investment of one-time federal relief funds to address homelessness in the city, channeling funds toward more housing units and gap housing for homeless individuals. It would also fund nine new staffers to the Homeless Impact Division.
The budget ordinance also includes 49% more total spending than last year for the Metro Planning Department, 35% more spending for the Office of Emergency Management, 18% more spending for the Department of Law and 15% more spending for the mayor’s office. A final budget book detailing what the spending increases for these offices would cover has not been released.
Overall, Metro Finance Director Kelly Flannery told council members that the proposed budget is balanced without one-time federal stimulus funds. It will not require a property tax increase. It is the first budget Flannery has overseen since joining Metro as finance director in January.
The increased spending in the budget is accounted for by increased revenues, Flannery said. The budget includes $319.6 million in new revenue, a 12.1% increase over the 2022 fiscal year.
Flannery told council members that while Metro’s finances are in better shape than previously, “we need to remain fiscally prudent.”
“There’s still work to do,” Flannery said. “This council remodeled Metro’s fiscal house, and the next step is to protect the house, to weatherstrip it, to make sure it doesn’t decay again.”
Future financial outlook
The budget does include $50.8 million in debt service funds. While Metro had planned to hold off on significant debt issuance until next year, Flannery said with anticipated interest rate hikes, it would be prudent to issue debt sooner.
“The 2023 budget is made up of difficult choices as we tried to assess the impact of these uncertainties,” Flannery said. “Creating a budget under these circumstances presents us with enormous challenges, and we’re using this moment as an opportunity to maintain our conservative revenue projection approach.”
Overall, Flannery told council members that Metro’s debt levels are “elevated but manageable.”
The Metro Council will begin department budget presentations May 18. A public hearing on the budget will be held June 7.