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A resolution requesting the Metropolitan Government conduct additional research and analysis regarding tax rates and services within the Urban Services District and General Services District to ensure all taxpayers in Davidson County are treated equitably.
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WHEREAS, the Metropolitan Government of Nashville and Davidson County (“Metro”) operates under a consolidated city-county structure consisting of the General Services District (“GSD”) and the Urban Services District (“USD”); and
WHEREAS, pursuant to the Metropolitan Charter (“the Charter”), the GSD encompasses all of Davidson County and funds general governmental services provided to all residents, while the USD exists within the GSD and is intended to fund enhanced urban services not provided uniformly across the county; and
WHEREAS, the Charter framework historically requires that services uniquely benefitting the USD be funded through the additional USD tax rate, while services provided countywide are funded through the GSD rate, ensuring equitable allocation of costs based on service levels; and
WHEREAS, property owners within the USD pay a combined tax rate consisting of both the GSD rate and an additional USD increment, while property owners outside the USD pay only the GSD rate; and
WHEREAS, the difference between the GSD tax rate and the combined USD rate has narrowed over time but has consistently reflected the additional services provided within the USD, with a gap of $0.85 in 2000, $0.57 in 2010, and $0.43 in 2020; and
WHEREAS, the Fiscal Year 2022 Operational Supplemental Budget provided for a consultant study relative to the application of services provided in the GSD and the USD of the Metropolitan Government; and
WHEREAS, in April 2025, Raftelis Financial Consultants released the results of that study, which included analyzing the Metro Charter and evaluating the current allocations of revenue and costs between the districts and the services provided in each; and
WHEREAS, the study provided recommendations for reallocation that purportedly reflected the services provided by Metropolitan Government and paid for by property owners in each district, including reallocating the cost of fire protection as a GSD-funded service based on findings that fire protection is provided on a countywide basis; and
WHEREAS, the Fiscal Year 2026 Budget incorporated these recommendations, reducing the USD rate from $0.332 to $0.032 and nearly eliminated the difference in tax rates between USD and GSD taxpayers; and
WHEREAS, the Raftelis study also identified several areas for further study that could mitigate the impacts of these changes to taxpayers in the GSD that to date have not been examined; and
WHEREAS, the Metropolitan Government should further review the options presented in the Raftelis GSD/USD study and provide recommendations about the most equitable path forward; and
WHEREAS, this review should include relevant stakeholders in the Metropolitan Government, which may include, but is not limited to, the Metropolitan Department of Finance, the Metropolitan Department of Law, the Nashville Department of Waste Services, the Nashville Fire Department, and the Nashville Department of Transportation and Multimodal Infrastructure; and
WHEREAS, these efforts are crucial to determine the proper balance of tax rates and services for taxpayers in both the USD and GSD in Nashville and Davidson County.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. The Metropolitan Council hereby goes on record as requesting that the Metropolitan Government, through the Department of Finance and other relevant departments, conduct additional research and analysis consistent with the follow-up analytical work identified in the April 24, 2025 USD/GSD Financial Study.
Section 2. Such research should include, but not be limited to:
1. Consideration of merging the USD within the GSD to create a single General Fund and Debt Service Fund for the Metropolitan Government;
2. Evaluation of Special Service Districts or Enterprise Funds for street lighting and solid waste services;
3. Consideration of a Special Service District, Enterprise Fund, or Special Revenue Fund for fire services; and
4. Identification of other potential strategies or policy options to mitigate or minimize financial impacts to taxpayers within the General Services District or to extend street lighting and trash collection services countywide.
Section 3. The Metropolitan Council requests that the Department of Finance provide a report of its findings and recommendations, including any policy options for Council consideration, to the Budget and Finance Committee no later than January 4, 2027.
Section 4. It is the intent of the Metropolitan Council that any additional changes to the allocation of USD and GSD expenses be undertaken only after thorough analysis, transparency, and careful consideration of impacts to all taxpayers.
Section 5. This Resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government requiring it.