Nashville Proposes Ambitious $6.9B Transit Plan Funded by Sales Tax Hike

Plan Awaits Metro Council Review and Voter Approval

Nashville Mayor Freddie O’Connell’s ambitious transportation overhaul, dubbed the “Choose How You Move” proposal, has an estimated price tag of $6.9 billion, to be implemented over a period of 15 years as per an independent audit released in the recent past. This proposal would raise the sales tax in Davidson County by half a cent to fund the construction of expansive transport infrastructure including 86 miles of sidewalk, an improved 24/7/365 bus-based transit system, 12 community transit centers, 17 park and ride facilities, and 600 upgraded smart traffic signals, among other improvements.

Upon approval from a state comptroller-approved independent accounting firm, the plan now heads to the Metro Council for review before it can be put forth to voters for final approval at the November polls.

Funding the Ambitious Proposal

According to Metro Finance Director Kevin Crumbo, the $6.9 billion cost is a projection that takes into account the best estimates of future inflation and other cost pressures. This estimated figure covers construction, operating and financing costs, as well as reserves, all in “future dollars.”

This expenditure will be offset by multiple revenue streams detailed as follows:

• A total of $3.26 billion will be generated from a sales tax surcharge
• Another $2 billion will be anticipated from the proceeds of revenue bonds, issued from 2026 to 2039
• A sum of $1.52 billion will be procured via federal and state grants
• The farebox revenue will contribute approximately $154 million

A Proposed Sales Tax Bump

Mayor O’Connell stated that the proposed half-cent sales tax bump would cost an average family in Davidson County about $70 per year. The current sales tax status has residents paying 6.25% on most groceries (not including prepared foods, alcohol, tobacco, candy, and dietary supplements) and 9.25% on all else. The introduction of the half-percentage point sales tax increase would raise these values to 6.75% for groceries and 9.75% for other taxable goods, aligning Nashville’s sales tax with many neighboring counties.

Previous Plan vs Current Proposal

To draw a comparison, implementing the 2018 “Let’s Move Nashville” proposal envisioned over the same 15-year period as the present one would have resulted in an estimated cost of around $14.5 billion. Crumbo, however, advised against giving too much importance to such comparisons because the underlying projects of the two plans differ substantially. In “today’s dollars”, the cost for the new plan’s construction period, from 2025 through 2039, would be approximately $3.1 billion with an additional $111 million constituting the annual recurring costs.