Tennessee Senate Republicans file bill to cut Nashville convention center funding

Tennessee Senate Republicans this week proposed new legislation that could effectively defund Nashville's convention center, an aggressive escalation from legislative leadership against the Metro Council after it blocked a bid to host the Republican National Convention last year.

Senate Majority Leader Jack Johnson, R-Franklin, sponsored the bill. SB 648 would end previously authorized privilege taxes, taxes over a base tax, in the Tourism Development Zone around the convention center, which are used to fund the center.

In a statement, Lt. Gov. Randy McNally, R-Oak Ridge, said Nashville no longer requires a special tax authority if it "has no interest in properly promoting convention tourism."

"Nashville has been afforded certain tools for the express purpose of encouraging convention tourism to the city. Over the last year, Metro has made it clear they are no longer interested in aggressively recruiting top-tier conventions to Nashville. That message has been received loud and clear by the General Assembly," McNally said. "If Nashville wants to prioritize political posturing over prosperity for its people, that's their prerogative. But the state does not have to participate."

The convention center is a powerful economic engine in the city, generating enough revenue that the Music City Center's Convention Center Authority now grants funds for other Metro projects, such as affordable housing initiatives.

Sen. Heidi Campbell, D-Nashville, sharply criticized the bill in a Friday statement.

"Half of Tennesseans can't afford housing, health coverage or child care, but instead of solving real problems, the controlling party spends time inventing ways to punish Nashville," Campbell said. "We were elected to work together for the good of all Tennesseans. Let's cease this petty race to the bottom before we crash the entire state economy."

Metro Legal is reviewing the bill. A spokesperson for Mayor John Cooper declined to comment.

Republicans seethe after failed RNC bid

Speculation of retaliation from state legislators emerged after Nashville's council blocked a deal last year that could have brought the 2024 Republican National Convention to Nashville. Council members who voted against the deal framework cited risks of political vitriol and concerns over security, cost and potential strain on city resources.

The Republican Party ultimately selected Milwaukee, the only other final contender.

A separate bill introduced earlier this month by Republican lawmakers would effectively cut Nashville's 40-member council in half — a proposal Nashville Legal Director Wallace Dietz said poses an "existential threat" to Nashville's self-governance. That bill is awaiting committee hearings.

At two speaking stops in Nashville this week, House Speaker Cameron Sexton, R-Crossville, framed the council bill as an efficiency move. Sexton said local business leaders had requested it, though he didn't say who, while members of the Rotary and Econ clubs questioned if the legislation was unnecessary interference with local government.

Sexton on Friday said he was "sure there will be other legislation filed that will cause the mayor and the council grave concern, like the legislation filed by the Senate."

"Metro may want to meet with the Lieutenant Governor sooner rather than later," Sexton said.

At-Large Council member Bob Mendes said Friday he didn't think the Tennessee General Assembly would stop with the Metro Council bill, and he anticipates other retaliatory measures could be coming down the pike.

"Ever since the supermajority was achieved 10 years ago, the only common thread is the punishments get more severe," Mendes said.

After taking a major financial hit during the peak of the COVID pandemic, the decade-old convention center brought in about $150 million in tourism taxes during the previous fiscal year ending June 30. About $55 million came in the downtown core's Tourism Development Zone and $95 million in hotel room and related taxes.

More:Downtown Nashville tourism tax collections are way up. So is competition with rival cities.

The TDZ was established to help fund the $623-million facility through repaying bond loans. A 2010 plan to fund the center cobbled together six taxes to help cover the center's debt, including ahotel occupancy tax, a flat $2 hotel room night fee, an airport ground transportation tax, a rental car tax, sales tax from the center and nearby hotels, and the sales tax collected in the TDZ.

Johnson's bill would repeal the city's authority to impose the extra sales taxes in the TDZ beginning on July 1.

Sandy Mazza contributed to this report.

This article originally appeared on Nashville Tennessean: Tennessee Senate bill would defund Nashville convention center