Nashville's 2017 reappraisal led to double-digit property value increases and a flood of appeals. As a result, the city is now facing a tax revenue shortfall for next year's budget. Property tax revenue collections are $20 million to $25 million lower this year than previously projected.
"It's a tough budget year for reappraisals and we had more appeals - and more successful appeals - than we might have typically expected," Mayor David Briley said. "That's primarily because of the significant increase in property values during the last four years. And second, our overall growth has not quite been as much as we had hoped for.
A Record Jump in Values
Nashville’s 2017 property values increased by a record 37 percent since the previous reappraisal in 2013. Taxpayers appealed their valuations in record numbers. The assessor's office experienced a 49 percent increase in informal reviews. There was also a 45 percent increase in appeals to the state Board of Equalization.
An analysis conducted by the Tennessean found that a larger proportion of property owners won their appeals, both informally and at the board, compared to statistics from the 2013 revaluation. At the board, 63 percent of property owners had their values changed, while in 2013, the figure was 55 percent.
By state law, Tennessee is revenue neutral; therefore Metro is unable to collect more tax revenue due to a reappraisal. Last year's year-over-year tax rate was reduced from $4.516 to $3.155 per $100 valuation or approximately 30 percent. This amounted to the lowest combined tax rate in the history of Davidson County. Nashville's budget for the current fiscal year is $2.2 billion, a 5.9 percent increase over last year.
One way to make up the current budget shortfall would be to propose an increase to the city's property tax rate; however Mayor Briley has ruled that out. "I think we can live within the current revenues and continue with a status quo budget," Briley said. "That's reason enough not to raise taxes.”
After a series of meetings and public hearings, the Metro charter requires the 2018-2019 budgets to be approved by June 15.