Will Nashville Voters Raise Taxes for Transit?
The Trump administration is pushing an infrastructure program that it says would spend $200 billion in federal money and generate up to $1.5 trillion in total infrastructure spending. It’s not clear whether a version of that plan can pass Congress this year. No matter what, the bulk of that investment would need to come from states and local governments.
Voters in Nashville are currently casting ballots on a referendum that will determine whether they are willing to increase local taxes to fund a $5.4 billion transit plan. The plan, named “Let’s Move Nashville,” calls for the city to vastly expand its mass transit system to meet the needs of the city that is ranked by Forbes as the nation’s seventh-fastest growing city.
The plan would add more than 25 miles of light rail along with new bus lines and transit centers. It also includes a “big dig,” an underground connector tunnel through downtown. When complete, the connector would carry both buses and trains.
To fund the plan, voters would need to agree to a series of tax increases. First, the sales tax rate would incrementally increase, topping out at 10.25 percent in 2023. There would be a surcharge added to local hotel and rental car taxes, along with new business and excise taxes. The potential impact of these tax increases on the commercial real estate, the local economy and the tourism industry is unclear.
The city would have 15 years to complete the projects, and the tax increases would remain in effect for at least 50 years.
Supporters of the plan say it is necessary. They point to the city’s traffic backups and say this plan would keep Nashville moving. “I believe that this plan, as developed over several years with input from thousands of Nashvillians, is our very best chance to take the next step forward as a city to address congestion, and also recognize that we have major issues in affordability, accessibility and opportunity,” supporter Charles Robert Bone said during a recent debate.
Opponents argue the plan is too expensive and would lock the city into technology that will be outdated before the project is even completed. “Light rail is already obsolete,” according to the site notax4tracks.com. “Tech is transforming how we commute, travel, work, play, consume, get, and more. Just some examples are: Geolocation, self-driving and driverless cars, electric pods, ride-hailing apps, delivery apps and tech, drones, and many more. Tech is a primary reason public transit is declining rapidly.”
It is not clear what effect the special election for mayor will have on the referendum, and vice versa. Shortly after the transit vote on May 1, Nashville residents will return to the polls on May 24 to vote for the city’s next mayor. Former Mayor Megan Berry stepped down on March 6 after admitting to felony theft charges.
Mayoral candidates aren’t lining up to support “Let’s Move Nashville.” As of early April, interim Mayor David Briley was the only top-tier candidate out of 14 to support the plan. Metro Council member Erica Gilmore, who initially supported the plan, has now come out against it. “Because I believe in fairness and I believe in justice, I cannot support the transit referendum on May 1,” she said this month. A spokesman for notax4tracks has also qualified to be a candidate. The referendum will test the political strengthen of the mayoral candidates leading into the special election.
Overall public opinion on the referendum remains unclear. Recent polling indicates the plan remains popular, but doesn’t enjoy majority support. For example, Nashville’s Tennessean newspaper reports: “A Vanderbilt University poll released exclusively to The Tennessean on March 4 found that 42 percent of registered voters support the plan compared with 28 percent who said they oppose it. The phone survey, taken between Feb. 8 and 19, was a sample of 723 registered voters.”
Commercial real estate recognizes that transportation projects are necessary to drive economic growth. Nashville needs a comprehensive approach to infrastructure to meet the future needs of the community. So while the prospects for this transit referendum are unclear, there’s no doubt that that city, state and federal governments will need to keep finding ways to design and build crucial infrastructure projects.
Dan Bauchiero, CCIM is Principal at Eakin Partners, LLC and president of NAIOP Nashville.