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Nashville council adopts FY2027 budget with grocery tax cut and new housing, childcare investments
Summary
After hours of debate over tradeoffs between a $9 million local grocery tax reduction and housing investments, the Metro Council approved the Tombs substitute FY2027 budget and the accompanying tax levy; the substitute adds new funding for eviction defense, housing preservation and child-care supports.
NASHVILLE — The Metropolitan Council on Tuesday approved the city’s FY2027 operating budget and tax levy after a contentious round of debate that focused on a local reduction to the grocery sales tax and competing calls to boost housing investments.
The council adopted the Tombs substitute for the budget, which Budget Chair Council Member Tombs described as a collaborative, balanced plan. The substitute passed its third and final reading by voice and roll call; the clerk announced the vote on the operating budget was 35 in favor, 2 opposed, 0 abstentions. The tax-levy ordinance that funds the budget passed later by roll call, 29 in favor, 7 opposed.
Why it matters: The substitute keeps a locally funded cut to the grocery sales tax — estimated in council debate at roughly $9 million in foregone revenue — while directing additional dollars to affordable housing, child care and eviction defense. Supporters said the mix delivers immediate relief to households while preserving investments that expand housing supply and protect vulnerable renters.
What the budget contains: Chair Tombs highlighted several edits in her substitute package, including an additional $2.1 million for the city’s eviction right-to-counsel program (bringing the program to $4.5 million), a $1.25 million boost to the hospitality hub (total $2.5 million), $1 million to the Barnes Housing Trust Fund (bringing it to $23 million), $41,500 for a second REACH shift in the Fire Department, and targeted funds for workforce development, entertainment, and child-care technical assistance. The substitute also preserves the mayor’s proposed reduction to the local grocery sales tax.
In council debate, opponents of the tax cut argued the same dollars could yield longer-term affordability gains if invested in housing production. Council Member Evan Seagull called for moving dollars into housing tools such as the Barnes fund and warned that the grocery-tax cut delivers only modest monthly savings for many families. Supporters, including Chair Tombs and others, countered that the grocery-tax reduction provides direct relief to low- and moderate-income households and that the substitute preserves both short-term relief and long-term housing tools.
Public testimony and priorities: Earlier in the meeting, several public commenters asked the council to protect and expand child care, saying affordable, reliable child care is an economic and workforce issue. Child-care providers and advocates testified in support of the Tombs substitute and the child-care investments embedded within it.
What’s next: With the budget and tax levy approved, the city will proceed to implement the FY2027 spending plan. Chair Tombs and council members urged continued oversight, pointing to mechanisms in the substitute and to opportunities for council-led follow-up (including bond authority and programmatic efforts) to expand housing supply beyond the amounts in this budget.
Vote totals: The operating budget as substituted passed 35–2–0; the tax levy passed 29–7–0. The council also adopted a resolution to reduce the local grocery sales tax (28–3–1) tied to the substitute.
