Inclusionary Zoning Is Rent Control and it can make the housing problem worse.

On Tuesday night June 2nd, the Metro Council passed memorializing RESOLUTION NO. RS2015-1516  which ask the Tennessee delegation to the General Assembly to pass legislation to allow the Metropolitan Government to enact inclusionary zoning legislation to ensure sufficient affordable rental housing. Welcome to the Peoples Democratic Socialist Republic of Nashville, San Francisco of the South.

"Inclusionary zoning" takes its name so as to indicate it is the opposite of "exclusionary zoning." Exclusionary zoning is a name applied to any zoning policy that attempts to exclude some people.  Up until it was ruled unconstitutional to exclude by race or ethnicity, some communities prohibited certain minorities from living in certain areas. After that form of overt discrimination went away, many cities imposed lot size restrictions which had the effect of making properties so expensive that only those who could afford to pay the price could live there. We still have minimum lot size zoning.

What is inclusionary zoning really? It is another term for rent control or housign price control. Several cities had rent control starting in World War II, but overtime most cities abandoned it.  It was found to lead to abandoned and run down buildings, and it prevented developers from building new developments. Over time most rent control was allowed to be lifted. With "rent control" getting a bad name, social engineers came up with a different model and called it "inclusionary zoning."  That sounds like a land use policy, but think of it like this: Assume we are concerned that some people do not have enough money to buy the same car a middle income or upper income person can buy, so we pass "inclusionary car shopping" that requires Car Max to sell 10% of their cars at a price that a low income person can afford and it has to be the same quality of car that a upper income person can afford. That is what "inclusionary zoning" does with housing.

Unbelievable, the ten or so Republicans on the Council voted for the resolution. The legislation passed unanimously on a voice vote.  Even the most conservative members, Robert Duval, Duane Dominy and Josh Stites voted for it. These are people who I normally have deep respect for and who I am sure think of themselves as conservative. That was not a conservative vote. To be generous, one could assume they did not know what they were voting on but that is not an excuse.

There are various models of "inclusionary zoning," some really bad and some so ineffective that they have little negative impact.  Inclusionary zoning may apply to rental property or homeownership property.  Either way, it shifts the burden to those who do buy or rent a unit not set aside as affordable to pay a higher price to subsidize those who pay below market rent or purchase price.  Some IZ models require the units to be kept affordable for as little as 15 years, some for up to 99 years. Some programs allow developers to pay into a fund rather than actually build the units.

Writing in Forbes magazine, author Scott Beyer points out that in In San Jose, California the city's IZ’s constitutionality is being questioned by the California Supreme Court.  There, developers building more than 20 units must make 15% of them affordable, or pay a fee of $122,000 per inclusionary unit.

He writes:

 IZ mandates both prevent new housing starts, and make market-rate housing more expensive. They prevent housing starts by acting as a tax on new development, thus making certain projects uneconomical; and because affordable units earn less, developers must cover losses by jacking up market-rate housing prices. In the study “Unintended or Intended Consequences?,” economists Tom Means and Edward Stringham define IZ as a price control, before noting that, like with other such controls, it discouraged production and raised prices in California.

He says a better alternative might be for cities to allow greater density without the price controls. The reason, he says, that housing is expensive in places like New York, San Francisco, DC, and other cities that have adopted IZ is that zoning regulations prevent supply from keeping pace with population growth. IZ can actually discourage construction and make the problem worse.

The National Center for Smart Growth examined the effect of IZ and concluded:

We find that inclusionary zoning policies had measurable effects on housing markets in jurisdictions that adopt them: the share of multifamily housing increases; the price of single family houses increases; and the size of single family houses decreases. These results are fully consistent with economic theory and demonstrate that inclusionary zoning policies do not come without cost.

We also found that housing prices in cities that adopted inclusionary zoning increased about 2-3 percent faster than cities that did not adopt such policies..... inclusionary zoning programs caused housing producers to increase the price of more expensive homes in markets where residents were less sensitive to price, and to decrease the size of less expensive homes in markets where residents were more sensitive to price. (link)

A study published in Reason magazine found that after passing IZ the average city produced only 15 units a year of affordable housing attributable to the policy and total housing production dropped from significantly and the average price of homes to increase significantly. The overall effect of the policy also was a significant decrease in property tax collections. (link)

It is my hope that the Nashville delegation to the General Assembly will simply ignore the Council resolution, but if they bring it to the State legislator, I hope the State Legislature will fail to pass it.

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Applications Now Being Accepted for Citizen Police Academy Session that Begins July 6

Press release - Nashvillians interested in learning about the inner workings of their police department and its enforcement/investigative strategies are cordially invited to apply for the 31^st session of the popular Citizen Police Academy, which begins its 12-week run on Monday, July 6^th.

          Classes will be held on Monday nights from 6 p.m.-9 p.m. through September 21^st in the community room of the Madison Precinct, 400 Myatt Drive.  Because class size is limited, interested persons are urged to apply immediately.  The deadline for applications is June 17^th.

          Participants will learn about police work through the perspective of a variety of guest speakers, including members of the police department’s specialized components.  Topics will include gangs, domestic violence, traffic/DUI enforcement, internet crimes, emergency preparedness, crime prevention and the judicial process.  There will also be a tour of the Emergency Communications Center and a demonstration by the Aviation, Canine and Mounted Units.

          “The Citizen Police Academy is a unique way to learn more about law enforcement in Nashville and how our officers partner with citizens to enhance the safety of neighborhoods,” Chief Steve Anderson said.  “We are genuinely proud to offer this program, which, since 1995, has graduated nearly 1,400 Nashvillians.”

          Each applicant should commit to attending at least 10 of the 12 sessions, be a Davidson County resident/business owner at least 21years old, and have no arrest record (excluding minor traffic violations).  While completion of the course gives citizens an understanding of the workings of the Metropolitan Nashville Police Department, it does not make a participant a certified law enforcement officer, nor is it designed to train citizens to perform law enforcement duties.  Applications are available at any of the department’s 8 precincts.  They can also be submitted on the Internet by logging onto http://www.nashville.gov/Police-Department/Get-Involved/Citizen-Police-Academy.aspx

          Persons desiring an application by mail or fax, or persons with questions, are invited to contact Michelle Crowder, the department’s Citizen Police Academy Coordinator, at 943-2110, or Officer Troy Meadows at 880-1781.

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What happened at 6-2-15 Council meeting: A long hearing on the budget w/ lots of opposition to jail relocation; pro rent control bill. Give away of tax money.

This is a long meeting- over four hours long. To get your own copy of the agenda, staff analysis and my commentary, follow this link.

After spending some hours watching summarizing and commenting on the public hearing portion of the meeting, and providing timestamp notation, I unfortunately had a computer malfunction and lost all my work, so I am not going to post commentary on the public hearings. The public hearing is very interesting and I encourage readers to watch it, especially if you have concern about the flood wall, the relocation of jail to Antioch, or the relocation of police headquarters to Jefferson Street.

To briefly summarize, on the operating budget people who think Metro does not spend enough money- people who want more spend on police, fire, schools, health, libraries and more, speak asking for more funding. No one speaks asking the Council to spend less. Conservatives are only active when the city wants to raise taxes but liberals are always engaged and unrelenting in the quest for bigger government and higher taxes.

The public hearing on the Capital Improvements budget has a few people speaking in favor of the flood wall, the jail relocation and the police headquarters relocation and a lot of people speaking in opposition. Both pass but are amendable on third reading and are referred back to budget and Finance.

All resolutions on consent pass and none are pulled.

These are the resolutions of interest not on consent.
RESOLUTION NO. RS2015-1499  refinances some city debt. It is deferred one meeting to track with the budget.
RESOLUTION NO. RS2015-1500  authorizes the issuance of $520 million in General Obligation Bonds. This includes $110 million for relocation of the jail to Harding Pl. and the relocation of the police headquarter, $96 million dollars for schools, $25 million for sidewalks and more.  It is deferred one meeting to track with the budget.
RESOLUTION NO. RS2015-1501 is another deal to hand out money to Asurion, the cell phone insurance company. In 2011 we gave them a deal worth $2.4 million. This resolution pays them up to $50,000 for increasing their number of employees at their Crossings Boulevard location paying them $500 per job that they add from now through June 2017. There is also a bill on second reading (BILL NO. BL2015-1128)   that approves a tax abatement plan to benefit Asurion. This would freeze property taxes on the building the company occupies at the 2013 rate. The mechanics of how this would work is that the company would get an abatement for four years of any taxes due that exceed the $136,000 annual taxes that were being paid on the property prior to any improvements Asurion makes to the property. The amount of the abatement would be about $288,000 a year.
When one looks around and sees all of the growth taking place in Nashville, one would think the city should have fat tax coffers, but with tax freezes, tax increment financing and similar deals, a lot of money that would flow into the treasury is not.  Proponents of measures such as this say this companies will not locate to Nashville unless we entice them and that this is money well spend. I am leery of continuing these practices. The purpose of growth should not simply to be a bigger city. I think it may be time to call the bluff of these companies that come to us with their hand out. The resolution is amended to clarify that Metro would not make any payments until fiscal year 2015-16. It passes on a voice vote with no dissention.
 RESOLUTION NO. RS2015-1498 by Charlie Tygard request the   Metropolitan Civil Service Commission to consider and recommend an amendment to the General Pay Plan to partially base the compensation of Members of the Metropolitan Council upon Council and committee meeting attendance.
Recently, Channel 5 did an investigative piece and revealed that some Council members almost never attend committee meetings.  This is just not right! As Tygerd said, "It's not fair for certain council members to do all of the homework and others to get the same rate of pay and do nothing of the work.”
With a large council, the council must have a strong committee system.  It is in committee where the real work of the Council is done. It is in committee where the council can ask hard questions and get answers.  There is no way a councilmember can know all there is to know about the  bills on the agenda. Some of the Councilmen said they had regular jobs and could  not take off work to attend committee meetings. In my view, if a councilmember does not have flexibility in his job to attend to his council duties, he should not run for council.  If he cannot attend Council committee meetings he should resign from the council. The worst offenders were Emily Evans, who missed 83 committee meetings since 2013, Robert Duvall, who's missed 93 committee meetings in that time period, and Sean McGuire, who's missed 132 committee meetings since 2013! Among the top twelve members with the worst attendance records was Council member-at-large and Mayoral candidate Megan Barry. This meeting is again deferred one meeting.
RESOLUTION NO. RS2015-1515 by Charlie Tygard requesting the Davidson County Delegation to the Tennessee General Assembly to introduce and support the necessary legislation to require full-time Davidson County elected officials to submit an annual report to the Comptroller detailing the dates they worked.  The Tennessean recently did some investigative reporting, and got the records of the access card swipes of various elected officials.  These elected officials carry a unique card that records every time they enter a certain office or building and some of them have very poor records of showing up for work. This is also deferred one meeting.
RESOLUTION NO. RS2015-1516 ask the General Assembly to pass legislation to allow the Metropolitan Government to enact inclusionary zoning legislation to ensure sufficient affordable rental housing. Inclusionary zoning is another term for price fixing or rent control. An example of how it would work is a developer builds a 400 unit luxury condo downtown and the rent range is $4,000 to $8,000 a month. Under inclusionary zoning, some number of units, (maybe 10%) would have to be set aside as "affordable." Assume it must be affordable for people making 80% of the area median income, then that would be a rent of $1382 per month for a family of four assuming affordable is 31% of gross monthly income. That means those who rent at market rate would subsidize the rent of those who rent the affordable units. In my view fixing prices is simply wrong and the market should determine the price of things. As a practical matter it distorts the market. Also, there are other considerations. If one rents a luxury condo, it may include access to a gym, a spa, a dog walking service, a doorman, concierge service, and fresh cut flowers in the morning. Do those in the "affordable units" get the amenities?  In may view the state should not authorize rent control and this should be defeated. If I were in the Council, I would vote against it.  This passes on a voice vote. I am disgusted! It is unbelievable that the so called conservatives on the council support rent control. I should not be surprised however, a few years ago they all supported livery price fixing. I do not think there is a single committed conservative serving in the council.

All bills on First Reading pass.

Bills on Second Reading of interest:

BILL NO. BL2015-1123 adopts the tax rate, which is the same as the current tax rate of $3.924 in the General Services District and $4.156 in the Urban Services District. The tax rate is per $100 of assessed value which is 25% of appraised value for residential property.  It passes.
BILL NO. BL2015-1124 adopts the tax relief program for the low-income elderly. Never in doubt, it passes unanimously.
BILL NO. BL2015-1125 creates a new department of Metro Government, the Office of Family Safety. Currently, this office with a staff of nine is funded as part of the mayors office. This office provides one place where victims can go to talk to an advocate, plan for their safety, interview with the police, meet with a prosecutor, receive medical assistance, and receive information regarding shelter and other needed services. That will mean more pay for a department head and a new large bureaucracy. In my view we should be shrinking the number of departments not creating more. It is deferred one meeting to track with the budget.
BILL NO. BL2015-1126 is a new tax, initially to be at $2, imposed on all parties in a civil litigation case to help fund the salary of General Sessions Judges. I assume this is legal, but just as once upon a time one had to pay a poll tax to exercise the right to vote and now we think that was not proper, we are now going to make one pay a tax to have the right to have access the courts. This is shameful. This is deferred one meeting to track with the budget.
BILL NO. BL2015-1127 is a deal to benefit American General very similar to the deal to benefit Asurion described above.  It passes.
BILL NO. BL2015-1128  is the Asurion tax give-away described above. It passes.
BILL NO. BL2015-1129 establishes a codes offender school similar to the school we have for traffic violation offenders. The Director of Finance has refused to certify that there are funds available for this. It is deferred one meeting.

There are seven bills on Third Reading and none of them are of interest and they all pass.

Given that some of the incumbents who I have endorsed have voted for rent control, I may be reevaluating who I support for reelection or who I am supporting for at-large seats on the council. If they do in fact vote for the new tax on court access and vote to create this new bureaucracy, I doubt I will be supporting them in their campaign for reelection or their campaigns for at-large seats. I am hopeful that if we elect people like Lonnie Spivak, Ken Jakes and Stephen Clements that they will not disappoint. I would rather have three committed out spoken principled uncompromising conservatives with leadership ability on the council than a dozen lukewarm nominal conservatives.

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Johns Hopkins Psychiatrist: Transgender is ‘Mental Disorder;' Sex Change ‘Biologically Impossible’

I know it is politically correct to accept that there are many more than just two sexes now. Some people doing the classifying have five or six classifications. Sexual orientation and biological sex get mixed up and a biological man with a penis may get referred to in news stories as  "she" and "her" if  he wears lipstick and acts feminine.  The politically correct think everyone should get to choose if they are referred to as a "he" or a "she" despite what is between their legs and should get to choose which bathroom they use despite their physical anatomy. Facebook has 51 categories one my chose to describe their sexual identity.  Female impersonators and cross dressers and others who are confused about their gender identity are treated as if they were not male or female but are "transgender."  Not everyone got the memo:

Dr. Paul R. McHugh, the former psychiatrist-in-chief for Johns Hopkins Hospital and its current Distinguished Service Professor of Psychiatry, said that transgenderism is a “mental disorder” that merits treatment, that sex change is “biologically impossible,” and that people who promote sexual reassignment surgery are collaborating with and promoting a mental disorder. (read more)

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Nashville crowd passionately debates flood, jail plans

 Nashville crowd passionately debates flood, jail plans

The Tennessean, June 2, by Joey Garrison  - Nashvillians had their say Tuesday on three controversial city projects that Karl Dean is struggling to pass as he enters his final few months in the mayor's office. 

They had a lot to talk about, underscoring the climb the mayor faces for approval.

For about three hours Tuesday night, residents took the microphone at a Metro Council public hearing that saw passionate debate on proposals to build a $100 million downtown flood wall and protection system, consolidate the city's jails to a new $110 million facility in Southeast Nashville and build a $23 million police headquarters on Jefferson Street in North Nashville. (To read the rest of the story follow this link, however The Tennessean has finally built a pay wall to keep out freeloaders so only subscribers and read it.)

To summarize the rest to the story, Duane Dominy led the effort to stop the jail from locating to Antioch, Phil Clairborne is leading the effort to stop the floodwall and Eric Gilmore is supporting efforts to stop the police headquarter from locating on Jefferson. They plan to offer amendments removing these projects. Most people who spoke at the hearings spoke on these three projects. Not many people spoke on the operating budget.

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(update) What is on the June 2nd Council Agenda: Publilc hearings on the budget, tax give-away for Asurion, a new tax, rent control.

The first two items on the Council agenda on Tuesday night June 2nd are hearings on the Capital Improvements Budget (BILL NO. BL2015-1122) and the Operating budget (BILL NO. BL2015-1142) I have provided analysis and commentary on both at the following links:
Speak out now against a future tax increase. 2015-2016 Operating budget on public hearing Tuesday June 2nd.  
The public's chance to speak out against the Jail moving to Harding Pl., or other projects: Public Hearings on the Budget June 2nd. 

This may prove to be a long meeting. The public  hearings will take a while and there are several item that may prove controversial. Council meetings are much more interesting if you know what is being voted on. For a copy of the Council agenda and staff analysis follow the highlighted links.

There are 14 resolution on the agenda. Most resolutions are lumped together and put on the "consent agenda" and all pass with a single voted. If a resolution does not pass the committee to which it was assigned unanimously then it is not on consent and is considered separately. Any council member may, from the floor, ask for a resolution to be pulled off of consent and then the resolution will be considered separately.  These are the resolution of interest:

RESOLUTION NO. RS2015-1499  refinances some city debt. I do not know if this is a good deal or not but the staff analysis raises no concern.
RESOLUTION NO. RS2015-1500  authorizes the issuance of $520 million in General Obligation Bonds. This includes $110 million for relocation of the jail to Harding Pl. and the relocation of the police headquarter, $96 million dollars for schools, $25 million for sidewalks and more. I think the council should defeat this or at least defer it and then amend it down taking out the jail and police relocation money.
RESOLUTION NO. RS2015-1501 is another deal to hand out money to Asurion, the cell phone insurance company. In 2011 we gave them a deal worth $2.4 million. This resolution pays them up to $50,000 for increasing their number of employees at their Crossings Boulevard location paying them $500 per job that they add from now through June 2017. There is also a bill on second reading (BILL NO. BL2015-1128)   that approves a tax abatement plan to benefit Asurion. This would freeze property taxes on the building the company occupies at the 2013 rate. The mechanics of how this would work is that the company would get an abatement for four years of any taxes due that exceed the $136,000 annual taxes that were being paid on the property prior to any improvements Asurion makes to the property. The amount of the abatement would be about $288,000 a year.
When one looks around and sees all of the growth taking place in Nashville, one would think the city should have fat tax coffers, but with tax freezes, tax increment financing and similar deals, a lot of money that would flow into the treasury is not.  Proponents of measures such as this say this companies will not locate to Nashville unless we entice them and that this is money well spend. I am leery of continuing these practices. The purpose of growth should not simply to be a bigger city. I think it may be time to call the bluff of these companies that come to us with their hand out.
RESOLUTION NO. RS2015-1511 advances Google Optics, approving Network Hut locations on Metro property. There is nothing controversial about this, but is a noteworthy advancement leading to Nashville being one of the city with Google fiber optics.

There are 65 bills on first reading, but I don't look at them until second reading and I doubt many of the members of the Council do either. First reading is a formality to get the bill on the agenda and all bills on first reading are passed at one time in one motion.

There are 18 bills on Second Reading.  Here are the ones of interest:

BILL NO. BL2015-1123 adopts the tax rate, which is the same as the current tax rate of $3.924 in the General Services District and $4.156 in the Urban Services District. The tax rate is per $100 of assessed value which is 25% of appraised value for residential property.  With all of the growth in Nashville, I would hope the city could actually cut the tax rate, but that has never happened and probably never will. It seems Metro taxes only go in one direction no matter what happens.

BILL NO. BL2015-1124 adopts the tax relief program for the low-income elderly.
BILL NO. BL2015-1125 creates a new department of Metro Government, the Office of Family Safety. Currently, this office with a staff of nine is funded as part of the mayors office. This office provides one place where victims can go to talk to an advocate, plan for their safety, interview with the police, meet with a prosecutor, receive medical assistance, and receive information regarding shelter and other needed services. Why does this office of nine people need to be a standalone department?  That will mean more pay for a department head and a new large bureaucracy. In my view we should be shrinking the number of departments not creating more. I wish a council member would point that out and vote against it.
BILL NO. BL2015-1126 is a new tax, initially to be at $2, imposed on all parties in a civil litigation case to help fund the salary of General Sessions Judges. This is just another way to tax the public. I would vote against this. I assume this is legal, but just as when once upon a time one had a poll tax to exercise the right to vote but now we think that was not proper, I do not think one should have to pay to have the right to have access the courts.
BILL NO. BL2015-1127 is a deal to benefit American General very similar to the deal to benefit Asurion described above. 
BILL NO. BL2015-1128  is the Asurion tax give-away described above.
BILL NO. BL2015-1129 establishes a codes offender school similar to the school we have for traffic violation offenders. The Director of Finance has refused to certify that there are funds available for this. Unless it can be determined that this would be revenue neutral, I think it should be defeated.  
BILL NO. BL2015-1131  is part of the Google fiber optics deal allowing Google to attatch their equipment to telephone poles at their expense.

There are seven bills on Third Reading and none of them are of interest.

Thee are five memorializing resolutions. These are the ones of interest: 

RESOLUTION NO. RS2015-1498 by Charlie Tygard request the   Metropolitan Civil Service Commission to consider and recommend an amendment to the General Pay Plan to partially base the compensation of Members of the Metropolitan Council upon Council and committee meeting attendance. This will probably prove controversial. I support it.
Recently, Channel 5 did an investigative piece and revealed that some Council members almost never attend committee meetings.  This is just not right! As Tygerd said, "It's not fair for certain council members to do all of the homework and others to get the same rate of pay and do nothing of the work.”
With a large council, the council must have a strong committee system.  It is in committee where the real work of the Council is done. It is in committee where the council can ask hard questions and get answers.  There is no way a councilmember can know all there is to know about the  bills on the agenda. Some of the Councilmen said they had regular jobs and could  not take off work to attend committee meetings. In my view, if a councilmember does not have flexibility in his job to attend to his council duties, he should not run for council.  If he cannot attend Council committee meetings he should resign from the council. The worst offenders were Emily Evans, who missed 83 committee meetings since 2013, Robert Duvall, who's missed 93 committee meetings in that time period, and Sean McGuire, who's missed 132 committee meetings since 2013! Among the top twelve members with the worst attendance records was Council member-at-large and Mayoral candidate Megan Barry.
RESOLUTION NO. RS2015-1515 by Charlie Tygard requesting the Davidson County Delegation to the Tennessee General Assembly to introduce and support the necessary legislation to require full-time Davidson County elected officials to submit an annual report to the Comptroller detailing the dates they worked.  The Tennessean recently did some investigative reporting, and got the records of the access card swipes of various elected officials.  These elected officials carry a unique card that records every time they enter a certain office or building and some of them have very poor records of showing up for work. 
RESOLUTION NO. RS2015-1516 ask the General Assembly to pass legislation to allow the Metropolitan Government to enact inclusionary zoning legislation to ensure sufficient affordable rental housing. Inclusionary zoning is another term for price fixing or rent control. An example of how it would work is a developer builds a 400 unit luxury condo downtown and the rent range is $4,000 to $8,000 a month. Under inclusionary zoning, some number of units, (maybe 10%) would have to be set aside as "affordable." Assume it must be affordable for people making 80% of the area median income, then that would be a rent of $1382 per month for a family of four assuming affordable is 31% of gross monthly income. That means those who rent at market rate would subsidize the rent of those who rent the affordable units. In my view fixing prices is simply wrong and the market should determine the price of things. As a practical matter it distorts the market. Also, there are other considerations. If one rents a luxury condo, it may include access to a gym, a spa, a dog walking service, a doorman, concierge service, and fresh cut flowers in the morning. Do those in the "affordable units" get the amenities?  In may view the state should not authorize rent control and this should be defeated. If I were in the Council, I would vote against it. 

 

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Speak out now against a future tax increase. 2015-2016 Operating budget on public hearing Tuesday June 2nd.

The first two items on the Council agenda on Tuesday night June 2nd are hearings on the budget.  There are two hearings: the first is the hearing on the operating budget  (BILL NO. BL2015-1122) and the second is the hearing on the capital improvements budget for FY 2015-16 - 2020-21 (.BILL NO. BL2015-1142 )  The capital improvements budget is not really a budget and it does not authorize any spending. It is a prioritized wish list of what projects the city would like to build and how the project will be financed. It is very important however; if one wants to have something build then it must be in the CIB or to stop something, it needs to be taken out of the CIB. I discuss in more detail the importance of the CIB and how the public hearing on it may be an opportunity to kill the relocation of the jail to southeast Davidson County. Follow this link to learn more.

The operating budget funds the day-to-day operation of the city.  Big projects are usually funded by borrowing in the form of bonds. Some bonds may be revenue bonds, meaning the revenue generated from the project pays off the bonds for the project and others are general obligation bonds, meaning public funds will pay for the bonds.  There is not a hard and fast rule of what should be paid for out of current tax revenue and what should be paid for our of borrowed money.  As a general rule, things should not be financed for a period that is longer than the thing we are financing will last. The debt service is the amount of money that is in the operating budget that it takes to make the payments on the borrowed money. The debt service is part of the operating budget.

In addition to the operating budget, some money is set aside to fund repairs and fund other things that were not included in the operating budget. This set aside is 4 percent of the anticipated revenue of the city and this money is referred to as the "4% fund." For a real understanding where the money to operate metro government comes from and where it goes, follow this link: A Citizens Guide to Metro Budget.  Also, for a better understanding of the budget and to know more than even most councilmember will know, actually read the budget at this link. For a good summary of the budget, see the metro council staff analysis on page 2, 3, and 4 at this link.

 It is unfortunate, but it seems the only time conservative activist speak out against excessive government spending is when faced with a tax increase but liberals constantly speak in favor of more spending every year. At Tuesday night's meeting there will be people asking for more spending for sidewalks, more spending for schools, more for parks, more for mass transit, more hours for the libraries to be open, universal pre-K, pay increases for employees and any number of other things.  I will be very surprised if anyone is speaking asking the city to spend less.

The way the charter is written, the advocates of more spending have a structural advantage. Many times candidates for council will say they will oppose tax increases or elected council members will even claim they voted against a tax increase, when in fact they did not. Here is the way the Metro budget process works: The mayor proposes a budget and if the council fails to pass the budget, the budget become law without a council vote. So what usually happens when the mayor proposes a tax increase is that the Council comes up with a compromise alternative budget and it is passed. The mayor's budget, as an example, may call for a 35 cent increase in the property tax rate and the Council substitutes the mayors budget for a budget that calls for only a 25 cent increase. Some members of the Council who want no tax increase will vote "no" on the 25 cent increase that is before the Council.  The effect of this "no" vote is a vote for the mayor's larger budget rather than the Council's budget with a lower tax increase. I have heard members of the Council say, "I voted against that tax increase."  They are either lying or don't understand the effect of their vote.

While a tax increase is not before us now, it would still be beneficial if opponents of a future tax increase appear at the public hearing and speak out for more government efficiency and less spending. This would be a good opportunity for candidates for Council to show that they truly have an understanding of the budget process and if they oppose future tax increase, this would be a good opportunity to show they know what they are talking about.

At the public hearing these are some suggested talking points:

(1) If you know of a specific government waste or inefficiency point it out.

(2) Explain the charter provision that makes it almost impossible to oppose a tax increases and call for a future charter amendment to correct that.

(3) Call for outsourcing and privatization. The purpose of government should not be to provide employment for government workers, but to provide services efficiently when the private sector cannot. The city saved $7 million a year by outsourcing school janitorial service. At one time, the city picked up garbage and it cost much more than contracting with the private sector to pick up our garbage as we do now. We should constantly be on the lookout for opportunities to outsource and privatize.

(4) The city has a large unfunded and growing pension obligation. Long ago most private employers switched from a defined benefit plan to a defined contribution plan. It is time for Metro to make the switch.

(5)  The city needs an outside consultant to do a top-to-bottom evaluation looking for waste and inefficiently. In the private sector there is competition that keeps companies efficient; the government has no such force to keep government efficient. Government official get used to doing things a certain way and often do not examine why they are doing them. An outside consultant can compare Nashville to best practices and will not be afraid of stepping on toes.

(6) While many of us are concerned about affordable housing, high taxes can make housing unaffordable.  Low taxes helps keep homes affordable.

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The public's chance to speak out against the Jail moving to Harding Pl., or other projects: Public Hearings on the Budget June 2nd.

The first two items on the Council agenda on Tuesday night June 2nd are hearings on the budget.  There are two hearings: the first is the hearing on the operating budget  (BILL NO. BL2015-1122) and the second is the hearing on the capital improvements budget for the period 2015-16 thorough 2020-21 (.BILL NO. BL2015-1142 )  The capital improvements budget is not really a budget and it does not authorize any spending. It is a prioritized wish list of what project the city would like to build and how the project will be financed.  If contains everything from sewer replacements and expansions to green ways to sidewalks to schools. Before something can be build it must get in the capital improvements budget and the source of funding identified. If the public does not want something build such as a $100 million flood wall, or a new police headquarters on Jefferson St or a new consolidated jail on Harding Place, then the time to stop it is now! Once a project is authorized, the mayor can build it without additional council input. The way to stop a project is to get it taken it out of the Capital Improvement Budget.

If three hundred people show up Tuesday night with bright tee shirts that say, "Don't Dump all Criminals in my neighborhood" or something similar (you can probably come up with something more catchy than that), and twenty people speak on the issue at the public hearing, then that would go a long way toward stopping it.

Here are some keys to effective use of public hearings and some tips: Don't repeat what the person before you just said. Get together with others and divide up the topic. Signs are not allowed in the chamber but tee shirts with a message are. It is okay to refer to notes or read your message, if you must, but practice your speech and make eye contract and look up from your notes. Be rational and civil in your comments.

Here are some suggested talking points for why one opposes the jail locating to Harding Place: Our part of town has been hit hard- don't hit us again. The next mayor may have different priorities- wait and let the next mayor decide. Give us time to think about it- the first we knew about it was when we read it in the paper. It will cause a proliferation of undesirable neighbors- half way houses, bail bondsmen, payday lenders, and pawn shops and criminals who stay in the area and their families. Inmates released from jail need to be within walking distance of transportation options, half way houses, day labor employers, mental health resources and health clinics.

In addition to opposition to the jail moving to Harding Place, I hope there is opposition to the police headquarters moving to Jefferson. I do not think the police headquarters moving to Jefferson will be detrimental to that area, and in fact I think it could be an advantage. The reason, I think it should not be moved is that I think the jail, the courthouse, and the police station should all be located downtown. Those function need to be in close proximity to each other  and downtown is a central location. That is were they are now, so keeping there there does not imposed them on anyone else. The primary reason however, is that I think this administration has indebted the city enough and we should let the next mayor and council decide future priorities. This mayor has built the Music City Center, the new baseball park, the expanded riverfront park and amphitheater, the gulch pedestrian bridge, the Hickory Hollow ice rink and lots of other projects.  It is not that I think any one of these projects were bad projects, but cumulatively they have added a lot of debt to the city.  Unlike some of my conservative friends, I actually supported the new convention center. I would not have supported it if it was proposed for Knoxville or Memphis and I was a citizen of those cities, but I am bullish enough on Nashville to think it can succeed here.

As a percentage of the operating budget our debt service is no more excessive than in years past, but that can be misleading to judge it by that criteria only.  We have experienced a boom.  We are like a family that pays 40% of their household income toward debt payments such as credit card debt, mortgage payments, car payments and student loans.  Then, the husband starts earning bigger commissions and commission bonuses and and wife starts getting a lot of overtime. The family moves to a bigger house and buy newer cars and charges more to credit cards but their debt service is still only 40% of their household income. What happens when the commission slows down,  there are no more bonuses, and overtime is cut?

I do not think Nashville will always be the "it" city.  We should not base our long term spending on our day in the sun. If our nation experiences an economic downturn, or if their is another housing crisis or tourists simply do not want a repeat vacation to Nashville, we may be in big trouble.  I think we ought to take a break from our breakneck speed of government building and let the next mayor and next council decide priorities.

One thing to be aware of is that if something is taken out of the capital improvements budget, that allows other things that are in the budget to get funded.  Also, one reason to pay attention to the capital improvements budgets it that if one is passionate about a project and your councilman told you he would deliver, you may want to look at the capital improvements budget to insure it is in there. If it is not in the CIB then it is not even on the wish list.

BILL NO. BL2015-1142 is the capital improvements budget ordinance but it does not tell you much. To see what projects are actually included in the 2015-2016 capital improvements budget spending plan, follow this link.  That tells you what is proposed to be funded this year. To see the complete 340-page FY 2015-16 - FY2020-2021 Capital Improvements Budget, follow this link.

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Gov. Jeb Bush Highlights Success of School Choice Reforms While in Tennessee

Tennessee Federation for Children press release, NASHVILLE, TENN. (June 1, 2015) – At Saturday night’s annual Statesman’s Dinner for the Tennessee Republican Party, Gov. Jeb Bush made a passionate case for school choice and education reform, highlighting the impact his reforms had in improving education in Florida, as well as improving the individual lives of people impacted by the reforms. He spoke about Denisha Merriweather, whose life was positively impacted as a result of school choice, later becoming the first in her immediate family to graduate from high school and first in her extended family to graduate college.

This year, Tennessee legislators enacted a limited school choice program tailored to children with special needs but failed to enact a more robust program which could have served thousands of children in need.

Bush spoke about the transformative power of school choice and how Florida could serve as model for Tennessee. “In Florida, we created the first statewide voucher program of any state in the United States. And we expanded school choice both public and private to be the leader in the United States,” said Bush. “

Last year I met a woman named Denisha Merriweather. She’s an African American woman, who was in Florida when we started these reforms. She was held back twice in third grade. She was struggling. She lived in a family not dissimilar to families that are in poverty here in Nashville and other places where they move around, where there’s no stability in their lives, where they go school to school because that’s where instead of being able to pick the school of their choice they’re told by the monopolies where their kid has to go. She was angry and she was never told she was smart. Her godmother found out that we had a corporate tax scholarship program. A program that now sends 70,000 low-income kids to private schools, the largest by far in the country. Denisha took advantage of this. She was told for the first time that she was smart. There was discipline in the school. She understood that she could learn. She regained one of those grades that she lost. And Denisha Merriweather was the first in her family to graduate from high school and the first in her extended family to graduate from college.”

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