Metro Council FY2027 budget: grocery tax cut, housing funds, school/service shifts

Metro Council passed Nashville’s Fiscal Year 2027 operating budget on June 16, approving a package that targets affordability with a grocery tax reduction, expanded affordable housing and anti-displacement funding, and adjustments tied to schools and other day-to-day Metro services.

FY2027 basics: the budget runs July 1, 2026–June 30, 2027

Metro’s FY2027 operating budget takes effect for the fiscal year beginning July 1, 2026, and runs through June 30, 2027. That’s when departments and programs generally begin operating under the approved spending plan.

Grocery tax cut: mayor cites 22%, while WPLN reports a half-cent reduction

Mayor Freddie O’Connell said the budget includes a 22% cut to the local option sales tax on groceries, and he credited the vote with putting $9 million back into residents’ pockets. WPLN reports that the substitute budget incorporates a half-cent cut to the local option grocery sales tax, and that the grocery-tax reduction will take effect in the fall.

WPLN did not provide an exact day-month start date in its coverage, so the “when” question for receipts will depend on the fall implementation details Metro follows up with.

Affordable housing and anti-displacement: more tools, plus targeted increases

The mayor framed housing and anti-displacement as the budget’s main affordability focus, pointing to the Barnes Fund as a key tool in the Unified Housing Strategy. In the mayor’s telling, the FY2027 operating budget increases Metro’s housing spending by nearly 150% and builds on results from the Unified Housing Strategy—creating or preserving more than 3,000 affordable homes after roughly 16 months.

The mayor also said the budget adds an Affordable Housing Loan Program for people around 60% of area median income, and funds programs already supporting emergency housing needs, including Eviction Right to Counsel, home sharing, permanent supportive housing, rapid rehousing, and payments in lieu of taxes.

WPLN’s itemized look at the final package highlights additional funding including:

$2.1 million more for the Eviction Right to Counsel program
$1.25 million more for the Office of Homeless Services
$1 million more for the Barnes Housing Trust Fund allocation

Schools and city services: teacher support, a school performance audit, and pay plan funding

On the education side, the mayor said the FY2027 budget supports teachers and educators, including pay increases for teachers and support for the safe implementation of new school start times. WPLN also reports the final budget includes $1 million for a performance audit of Metro Nashville Public Schools.

For Metro workers and resident-facing services, the mayor said the budget fully funds the pay plan approved by the Civil Service Commission—projected to provide a total pay increase of 3.7% for most employees. The mayor’s release also says the minimum hourly rate for full-time entry-level Metro jobs would increase to $22.50 per hour.

The mayor added that Metro Public Health’s Nashville Strong Babies program would receive an increase of $250,000 to support the Doula program. WPLN reports the budget includes roughly $400,000 for REACH, a non-police response program.

What to watch next

Grocery tax timing: Metro has said the grocery-tax reduction takes effect in the fall—watch for the exact implementation schedule and how it shows up on receipts.
Housing rollout: as the Barnes Fund and new affordable-housing loan tools get operational, residents and service providers will want to track how the anti-displacement programs are expanded.
School implementation: keep an eye on how teacher pay support and school start-time changes are carried out as FY2027 begins.

Sources

Look for updates to this story

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