Holding Down Debt & Taxes
A great city must have a healthy and transparent financial balance sheet. Over the past few years, Nashville has added many exciting new public buildings and venues downtown. And that’s great, but we now also are dealing with the additional debt that funded them. Add to that the more than $3 billion in unfunded pension and health benefit obligations for city workers, who devoted their lives to serving us, and you understand why Nashville’s debt is officially a problem for taxpayers, who are ultimately responsible for it.
Like any family budget, we can’t keep running up the credit card bill and then avoiding the “how are we going to pay for this” conversation. The “Nashville Way” is to use a common sense strategy of drawing up a sensible budget that stops the bleeding, prevents spending beyond our means, and allows us to “grow into our balance sheet.” This approach would allow our economic growth to generate the added revenue we’ll need to pay down our debt, rather than requiring tax increases that would burden taxpayers and stifle our economy.
Here’s how we can get control of our debt problem:
1. Reject “Kick-the-Can”
The “Nashville Way” is to address challenges openly, honestly and immediately. And it refuses to saddle our children with obligations they didn’t create and can’t afford.
2. Address Unfunded Liabilities
We must protect Metro’s fiscal health and secure the benefits of retired government employees by putting the funding of their pension and health insurance on a more sound footing. The “Nashville Way” is to look out for the hardworking folks who contributed their fair share to our economic pie.
3. Restore Nashville’s Credit Rating
Nashville’s credit rating has been downgraded, meaning that investors see us as riskier than before. What does that mean for Nashvillians? It means that we must pay more in the form of a higher interest rate for anything that requires debt financing. That’s more for new road construction, more for large water and sewer projects and the like. Dealing with the city’s debt problem is the key step in restoring Nashville’s good credit and lowering the cost of the major infrastructure projects our city desperately needs.