At a time when Metro Nashville faces unknown financial challenges as a result of the coronavirus outbreak, Mayor John Cooper announced at his first State of Metro address on March 31 that he will “sharply increase” the property tax rate in the next fiscal year.

The budget proposal for fiscal year 2020-21, which was originally slated to be announced in accordance with the address, will now be submitted to the Metro Nashville Council in April, Cooper said. Metro Council will then either approve Cooper's proposal or a substitute budget.

“The final amount will be determined with the best information available, but it will be substantial," Cooper said. "This is something we have to do ... Metro’s finances are in a place where there is no option. We can’t print money or borrow to cover our operating expenses. We must raise property taxes, as difficult as that is right now.”

Cooper said the tax increase—which would be the first tax increase since 2012—comes at a time when city leaders are grappling with the aftermath of the March 3 tornado, the ongoing COVID-19 crisis and the possibility of "the most sudden and sharp recession in American history."

In addition to approving an unbalanced budget for the current fiscal year, which later had to be adjusted, Cooper said the city is operating on thin cash balances and increasing debt payments. Metro Council narrowly avoided a property tax increase in both of the last two budget cycles.

“Even before the tornado and COVID-19, Metro faced difficult issues,” Cooper said. “We have a shortage of teachers and first responders. Our children need new textbooks ... Many residents lack affordable housing. We need more sidewalks, safer intersections and a better transportation system. Our future requires sustainable financial management.”

However, Metro Nashville also faces immediate financial hurdles, Cooper said. In the fourth quarter of fiscal year 2019-20, the city is estimated to lose between $200-$300 million in sales taxes and other revenues.

In an effort to offset some of the city's loss in revenue, the Music City Center has agreed to contribute an additional $35 million to the city in addition to its $12.6 million annual payment in lieu of taxes, which was announced in the fall.

"Our local economy, and with it Metro’s revenues, are falling dramatically ... This shortfall requires immediate action,” Cooper said. “With this uncertainty, our first concern must be in maintaining the delivery of essential services of Metro government. To protect our police, our fire, our basic services, that requires financial stability. Tough decisions will be required in the weeks and month ahead to get us through this crisis and give us a better future.”

On March 26, Finance Director Kevin Crumbo announced the city will immediately set in motion a hiring freeze, with the exception for public safety positions, as a way to cut spending. Additionally, the city is also banning travel for city employees and asking departments to look for cost reductions.