The Music City Meltdown

Link: https://www.wsj.com/articles/the-music-city-meltdown-11619649990

Excerpt:

Like many cities, Nashville is also in hock to pensioners, with $4.3 billion in unfunded promises for retiree healthcare. And though Nashville’s pension system is well-funded, it is also expensive to maintain because employees contribute almost nothing, leaving taxpayers on the hook for about $110 million in annual contributions—and potentially more when investments tank. Despite the burden, the city resisted adopting reforms the state enacted in 2013, when Tennessee switched to a pension plan that requires employees to contribute 5% of their wages.

Nashville’s balance sheet wasn’t in any shape to endure a massive pandemic hit. Led by a 50% decline in tourism, the city’s economy slumped last spring, and unemployment soared above 15%. That punched a $332 million hole in the fiscal 2021 budget, prompting then-Tennessee Comptroller Justin Wilson to warn in September of a state takeover. The city could become “kind of like a teenager coming to their parent asking for $20 to go to the movies,” he said.

Author(s): Steven Malanga

Publication Date: 28 April 2021

Publication Site: Wall Street Journal

Nashville’s financial health earns it ‘sinkhole city’ designation

Link: https://www.johnsoncitypress.com/news/state/nashvilles-financial-health-earns-it-sinkhole-city-designation/article_bc49b4a1-8c1f-5f63-a129-31093266adfe.html

Excerpt:

Nashville recently was named a “Bottom 5 Sinkhole City” by the nonpartisan think tank Truth in Accounting (TIA) in its fifth annual Financial State of the Cities report.

TIA examined the fiscal health of the 75 most-populous U.S. cities and graded and ranked the cities accordingly. The 2021 report is based on fiscal year 2019 comprehensive annual financial reports.

“At the end of the fiscal year 2019, 62 cities did not have enough money to pay all their bills,” the report’s executive summary read. “This means that to balance the budget, elected officials did not include the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.”

Author(s): The Center Square

Publication Date: 13 February 2021

Publication Site: Johnson City Press