I know this story is a little old but I only just saw it:
Tax-Averse Nashville Goes Where Few Other Cash-Poor Cities Dare
Uh-oh, where is this going?
In a matter of weeks, the coronavirus pandemic has frozen the tourist-powered economy of one of the hottest cities in America. Nashville, Tennessee, finds itself staring into what Mayor John Cooper is calling its worst financial situation ever.
Yes, we know. We said this would happen. We said that the lockdown was a bad idea. We said that when it got stretched beyond the initial two weeks “flatten the curve” that it would be a disaster.
So what is the Mayor going to do?
Cooper did what few mayors have dared. Last month, he proposed a 32% property-tax increase to help Nashville’s city-county government weather an estimated $470 million revenue loss over the next 16 months.
HOLY FUCK!!!
Thirty-two percent increase in property tax?
If you are a normal person who pays into escrow every month, you are looking at a few hundred dollars a month increase in your mortgage payment.
If you are a property owner who rents to others, either you lose your profit or you pass the cost onto your tenants and hit them with a rent increase they weren’t expecting.
All of this done to people who haven’t been working for the last few months and can expect their business not to pick up to full strength any time soon.
For businesses, it’s even worse.
Nashville restaurateur Howard Greenstone said Cooper’s proposal comes as retailers are preoccupied trying to navigate new social-distancing restrictions and a bleak outlook for tourism.
Greenwood said he pays about $75,000 in property taxes for one of his restaurants, Adele’s, a popular brunch spot, and the tax bill could rise by $24,000 as a result.
Either Greenstone raises prices, cuts costs elsewhere, or loses $24,000 in income. Understand that the profits in the restaurant industry are very thin, usually only 3-5%. Raising prices isn’t easy as restaurant pricing is very competitive, and regulars resent price increases.
My family owned a restaurant, I am very familiar with this. Try raising the price of coffee a quarter. Old customers will bitch at you that “I’ve been paying fifty-cents a cup for 30 years.” Yes, that’s why we raised the price, we lose money on every $0.50 cup. “I’ll never come to this place again.” We’ll just assume that you died in your retirement condo you crotchety old fuck.
Cooper’s fiscal 2021 budget would avoid layoffs, but they loom.
“If this is not passed, my ability to finance next year will demand immediate and sharp layoffs, which would also be unprecedented,” Cooper said.
Who wants to bet me that at the top of the list are teachers, police, and firefighters?
As the Tennessean reports:
Cooper outlined the reasoning behind several facets of his plan during the interview, explaining why he thought it was the best path forward despite painful decisions that will affect every Nashvillian.
“The budget we wanted to present of course was for pay raises for teachers, first responders and employees, neighborhood investment and then things such as body cameras,” he said. “But you are not in the normal budget year.”
Let’s take stock of the situation.
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- The Mayor forces businesses to close
- Businesses don’t collect revenue so don’t pay taxes
- The city has a budget shortfall
- The Mayor raises taxes on people already on a financial knife-edge
- People don’t want to pay more in taxes in hard times
- The Mayor threatens to take away their teachers and firefighters
- More business fail, more people go bankrupt, more people end up defaulting on their taxes
This is a shit spiral of doom.
The Mayor went to Harvard and got his MBA from Vanderbilt, you’d think he’d be smart enough to see this coming.
It makes you wonder what would happen if people called his bluff?
“Fire the police. All they did during the COVID was shut down bars and arrest business owners for trying to make a buck. I have a carry permit and a fire extinguisher, fuck you.”
This tax hike is just going to show up to bayonet the wounded that weren’t already killed by the shutdown.
I guarantee that people looking to move in or to Nashville, or were looking to open businesses in Nashville, are going to start looking in areas around the city not affected by the proposed tax hike.
We saw what happened in NYC and California when they raised taxes, people went to Texas and Florida.
The Mayor of Nashville wants to save his budget but is going to kill the city in the process.
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