Here’s an annoying thing about our water bills
With the anti-tax referendum failing to make it on the ballot it inspired me to write about one of my favorite little sleight-of-hand tax tricks that was passed along to all of us the beginning of this year.
The tax trick? It’s your new higher monthly water bill!
Wait, did you think the money in your water bill was just going to Metro Water Service? Interestingly, more of it than ever is now ending up in Nashville’s general fund.
To be clear, we are not talking about huge amounts of money. It was just enough money though to bail out Mayor Cooper from having to make tough decisions (like cutting services/jobs or raising taxes) ahead of the State’s potential receivership guillotine. Remember, Nashville’s budget was out-of-balance and if we didn’t come up with cash (or reduce expenses) we would have been in a lot of trouble with the state. In the end, this is just one of those things that’s kinda annoying and ends up raising more questions.
(Quick background: Metro Water has some major capital projects they’d like to get bonded out and they need a greater amount of revenue [our higher bills] for the lenders to be comfortable. That’s part of life in a growing city. There’s going to be some infrastructure demands.)
Before we get into the questions let’s just take a look at how your water payments are ending up in the city’s general fund (like your property taxes do) at a 250% increase from the past.
Previously, Metro Water Services had a PILOT (payment in lieu of taxes) of $4,000,000 annually to Nashville. This was set to run through at least FY23. Then, a fun little series of events happened in December 2019.
1- The metro council voted unanimously (always an interesting sign!) to approve a water rate increase.
2- Metro Water agrees to increase it’s PILOT to metro by $10 million dollars.
3- The state relents on the receivership threat and approves Nashville’s budget as our revenue / expenses gap is closed.
What great timing everyone! Here is the breakdown below.
So, all of this is a good thing right? The budget was solved! We did it!
Here’s some reasons why it gives me pause….
- Nashville’s leaders put our budget into the mess it was in and we bailed them out indirectly. Instead of making a hard decision like cutting $10 million more in jobs/services or coming to the tax payers for a mid year increase, they instead found a new middleman.
- Getting a PILOT increase from the Music City Center is a good thing because that is money that we, as Nashvillians, would never get anyway due to the TDZ. The Water PILOT on the other hand is literally being funded by us.
- Why only $10 million? Why not more? Why couldn’t they give $15 million and then the Barnes Fund would have been whole? Everyone’s water rate increases should allow for a great deal more of cash.
- The stormwater fees were raised the other year across the board. Why didn’t we get an increase in the PILOT then?
- If the Tornado/COVID never happened would Cooper have presented a budget with a tax increase for FY21? It makes me wonder if the plan to fulfil his pseudo campaign promise of “no tax increase” could have been accomplished with just “higher water bills for everyone.”
Overall this isn’t the end of the world, it’s just one of those annoying things that I think about every month now that my tax bill AND water bill are higher and both end up going to the same place.
