A new resolution before the Nashville Metro Council aims to redirect a portion of state real estate tax revenue back to the city to fund critical local projects. Council Member Tasha Ellis is championing the measure, which she argues will provide a much-needed financial boost for affordable housing, infrastructure, and programs for senior homeowners.
The proposal, designated as Resolution RS2025-1616, calls on the Tennessee General Assembly to authorize two significant changes: allowing counties to implement impact fees on new construction and allocating 3% of the state's real estate transfer tax revenue directly to local governments.
Key Takeaways
- Metro Council Member Tasha Ellis has introduced Resolution RS2025-1616.
- The resolution seeks to allocate 3% of state real estate transfer tax revenue to local municipalities.
- Funds would be dedicated to infrastructure, affordable housing, and senior home repair programs.
- The measure could generate an estimated $7.8 million annually for local initiatives.
- Ellis is calling for public support to encourage the Metro Council and Mayor's office to pass the resolution.
Details of the Proposed Legislation
Resolution RS2025-1616 represents a strategic effort to give local governments more control over managing the impacts of rapid growth. The proposal has two primary components designed to create new, sustainable funding streams for Nashville and other Tennessee counties.
The first part of the resolution seeks state authorization for counties to collect impact fees from developers. These fees are charges levied on new construction projects to help offset the costs of the additional public services and infrastructure required to support them, such as roads, schools, and emergency services.
The second, and perhaps more significant, component is the request for a 3% share of the state's real estate transfer tax. This tax is collected by the state whenever a property is sold. Under the current system, this revenue goes entirely to the state. Ellis's proposal would redirect a small portion of it back to the communities where the transactions occur.
What is a Real Estate Transfer Tax?
A real estate transfer tax is a one-time tax imposed on the transfer of title to real property from one person or entity to another. It is typically calculated as a percentage of the property's sale price. In Tennessee, these funds currently contribute to the state's general budget.
The Financial Projections
The push for this change is backed by data suggesting a substantial financial benefit for local programs. According to information highlighted by Council Member Ellis, the proposal is not just a concept but a tangible financial solution.
A policy brief from ThinkTennessee, a nonpartisan think tank, estimates that dedicating just 3% of the existing state transfer tax revenues could have a major impact. The analysis indicates this small percentage would generate approximately $7.8 million annually for local initiatives across the state.
$7.8 Million: The estimated annual revenue that could be generated for local programs if the state allocated 3% of its real estate transfer tax back to municipalities.
This recurring revenue stream could provide a stable source of funding for projects that are often subject to the uncertainties of annual budget negotiations. For a rapidly expanding city like Nashville, such a fund could prove crucial in addressing the growing pains associated with its development boom.
A Lifeline for Seniors and Affordable Housing
While the resolution addresses broad needs like infrastructure, Council Member Ellis has placed a special emphasis on how the funds would support two interconnected issues: affordable housing and senior citizens.
In a press release, Ellis specifically pointed to senior home repair as a vital component of preserving affordable housing. For many older residents on fixed incomes, rising property values can lead to higher property taxes and expensive home maintenance costs, creating pressure to sell their long-time homes.
"Senior home repair is a key element of affordable housing preservation," Ellis stated, underscoring the need to help seniors age in place and maintain the stability of established neighborhoods.
The proposed funds could create or bolster programs that offer grants or low-interest loans to elderly homeowners for essential repairs, such as fixing a leaking roof, updating electrical systems, or making accessibility modifications. By helping seniors maintain their properties, the city can prevent displacement and preserve its existing stock of affordable housing.
A Call for Public Action
With the resolution pending a vote, Council Member Ellis is not just relying on her colleagues for support. She has issued a public call to action, urging Nashville residents to get involved in the legislative process.
Residents are being encouraged to contact their Metro Council members and the office of Mayor Freddie O'Connell to voice their support for Resolution RS2025-1616. This public pressure is seen as a critical step in demonstrating widespread community backing for the measure, which could influence its passage in the council and strengthen the city's appeal to the state legislature.
The success of the resolution at the local level is the first step. If passed by the Metro Council, it would serve as a formal request from Nashville to the Tennessee General Assembly to consider amending state law. The ultimate decision on allowing impact fees and sharing tax revenue rests with state lawmakers in the upcoming legislative session.
The outcome of this initiative could set a precedent for how Tennessee manages the fiscal relationship between the state and its rapidly growing cities, potentially providing a new model for funding local needs directly from the economic activity that creates them.
