Transit thoughts (10/28/17 edition)

The Mayor outlined her transit plan on October 17, 2017. So far, only high level summary bullet point, pictograph, and animated information is available about the plan. I am not expecting to see the detailed financial assumptions and modeling behind the plan until December. Because the details are important, this post is only a set of preliminary thoughts.

First, a reminder about the process…earlier this year, the state legislature passed the IMPROVE Act allowing cities to add a tax surcharge to help pay for mass transit. Under the IMPROVE Act, Metro can impose a local tax surcharge if: (1) A CPA firm approves Metro’s transit plan — this basically requires the CPA firm to agree that the revenue from the proposed new tax surcharge is sufficient to pay for the proposed improvements; (2) the State Comptroller also has to confirm that the numbers add up; (3) if the Metro Council approves the plan, it is placed on a referendum; and (4) if the referendum passes, the local tax surcharge goes into effect.

As of today, none of these steps have taken place. The Mayor has announced the plan and an accounting firm (Kraft CPAs) is reviewing the plan. I believe the administration expects to get Kraft’s approval and the Comptroller’s approval before the end of the year. Then, the Council will be asked to approve the plan by early February in time for the scheduled local primary election on May 1, 2018.

In August, I laid out what I would need to see in the plan in order to vote in favor of placing it on the ballot. I listed five things:

  1. A description of what the new taxes would be: This has been accomplished. Well over 95% of the new funds will be from a local sales tax surcharge. This will likely continue to generate discussion straight through the referendum because it will leave Nashville with the highest sales tax in the country — tied with Chicago.
  2. A description of how the Gallatin Pike rail line will cross the river: I haven’t seen it in any administration materials, but the Nashville Business Journal has reported that the existing James Robertson Parkway bridge over the Cumberland River will be replaced with a wider bridge to accommodate two rail tracks.
  3. A description of how transit riders will get around downtown: This one has been answered too. The plan recommends building a $936 million tunnel under 5th Avenue downtown. The tunnel would have stops at Music City Central, Broadway, and somewhere in SoBro.
  4. A description of how riders will get around downtown: This one has been answered. With three stops in the proposed tunnel, most everywhere in downtown would be fairly accessible on foot.
  5. A description of how future operating losses would be funded: Until we see the financial assumptions and modeling, it is not possible to have an opinion about this factor.

In addition to these, the summary information provided so far raised several new questions:

  1. The tunnel: Until news of a proposed tunnel starting leaking out in late August, I hadn’t considered this at all. On the one hand, it is audacious and makes a lot of people wonder whether it is feasible. On the other, I know that NES successfully built a substantial tunnel near downtown in the last decade. I think the administration is going to have to provide a lot more information and experts on this part of the plan. Voters owe it to Nashville to take a hard look at this. (I want to be clear…I am NOT saying it’s a good or bad idea. But I am saying that a 2 mile $936 million tunnel through limestone that is less than a half mile from a major navigable river deserves some scrutiny before the referendum.)
  2. The sales tax: A lot of people are going to complain about using sales tax for transit at all. I am going to leave that issue alone for now, and focus on a different question. As far as I can tell, every major transit project in the history of the world ended up costing more than projected. When this project ends up costing more, will we raise the sales tax again? Property taxes? I think it is fair to work through where the next round of money comes from, and when that might happen. I suspect the administration’s perspective is that their financial model is so conservative that this is not a concern. When we all see the financial model, we’ll get to form our own opinions about that.
  3. Three rail lines were shortened since nMotion’s original recommendations: When nMotion made its recommendations in 2016, it suggested the Charlotte rail line should run to River West, the Gallatin rail line should run to Rivergate, and the Murfreesboro rail line should run to Bell Road. When Metro’s consultant put out its report in August 2017, these lines got split into two phases, and in the Mayor’s plan Charlotte ends at 440, Gallatin ends at Briley Parkway, and Murfreesboro ends at the airport. The Tennessean talked to the Mayor’s office about these shortened lines and reported that a spokesman said building these rail lines as originally planned would mean “increasing taxes to a rate that the mayor’s office has determined unreasonable.” Before people vote on the referendum, they should think through whether these abbreviated rail lines make sense. Will people drive from Murfreesboro or Antioch to the airport to catch a train the rest of the way into town, for example? Also, if it is not possible to pay for the originally envisioned lines now, will that change in the future?

More thoughts to come after the financial assumptions and modeling are made available.

Bob Mendes

Bob Mendes represents all of Nashville as a Council-At-Large member of Nashville’s Metro Council. He is Chair of the Council’s Charter Revision Committee, a member of the Metropolitan Audit Committee, and a member of the Council’s Budget & Finance Committee, Rules & Confirmations Committee, and Ad Hoc Affordable Housing Committee. Bob also practices business law at Waypoint Law PLLC. Bob’s complete bio is here. You can follow Bob @mendesbob.