Train Boondoggles Not Just For California, Nashville Set To Vote On Tax Hikes For Light-Rail

Nashville, Tenn.- Nashville, one of the fastest growing cities in the U.S., has received a number of acclaimed chefs from New York City in recent years. Now a ballot measure whose fate will be decided by voters on May 1st seeks to impose a series of local tax hikes that would push Music City tax rates beyond those of the Big Apple, one of the most heavily taxed jurisdictions in the world.

The upcoming voter referendum, which has been referred to as “one of the most momentous public referendums in Nashville history,” was initially championed by former Mayor Megan Barry (D), who resigned on March 6 after pleading guilty to a felony charge. The Nashville Metro Council referred the measure to the May 1st ballot by a 34-2 vote in February. If approved by voters, the transit referendum would impose billions of dollars in higher taxes on individual, families, and employers residing in Nashville, as well was visitors to the city. Levies on hotel stays and car rentals would rise, as would business and sales tax rates.

The referendum asks voters to sign off on a $9 billion undertaking whose key features include the construction of a light-rail system, a new downtown tunnel, and expanded bus service. The referendum, if approved by voters, would impose the following tax hikes to fund the project:

A 5% sales tax increase, taking the combined state and local sales tax rate from 9.25% to 9.75% starting next year. The rate would ultimately clime to 10% by 2023, a more than 8% increase from the current rate.
A 20% business tax increase, which would reduce the job-creating capacity of Nashville employers, along with their ability to invest in expansion of their business or give existing workers pay raises.
A 6.25% hotel tax increase that would make Nashville a less attractive destination for bachelorette parties, sporting events, conventions and conferences that generate a great deal of economic activity, revenue, and jobs for the local area.
A 20% rental car tax increase that, though sold as a way to export the tax burden to tourists and other visitors, would also hit Nashville residents.

The NoTax4Tracks political action committee, the group working to defeat the referendum, estimates that the plan would cost each household $43,608 over the life of the plan, more than $13,000 per person. The PAC believes that voter rejection of the referendum will force city leaders to come up with a plan that is more effective when it comes to reducing congestion, less costly to taxpayers, and is a solution that incorporates emerging technologies like driverless vehicles.

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