Financial columnist pans GOP plan to slash Nashville convention center bond funding

Joe Mysak, a municipal market columnist for Bloomberg news, is blasting a proposal by Tennessee Republican lawmakers to eliminate a revenue stream for Nashville to pay off the $560 million balance on bonds issued to build the city’s new convention center.

“The municipal bond market is no place for political theater,” Mysak writes. “That’s because the market can’t discern between tragedy, comedy and farce. To municipal bond buyers, it’s all drama, and one thing they know is, they don’t like it. Once politicians start playing games with credit, the cost of borrowing in the municipal market is going to go higher.”

The move to ban the capital city from using privilege taxes to pay back the bonds comes after the Nashville Metro Council last year rejected a proposal for the city to host the Republican presidential convention in 2024.

“If Metro has no interest in properly promoting convention tourism, they no longer require the special tax authority granted to them for that purpose,” McNally said about the bill, which is being sponsored by Senate Majority Leader Jack Johnson (R-Franklin).

Mysak writes in the column he doesn’t think Tennessee can change its legal obligation to bondholders in the manner laid out by the bill. The Bass, Berry & Sims law firm, the city’s bond counsel, didn’t return Bloomberg’s calls for comment.

“For some very short-term political fun, taxpayers had better steel themselves for some financial pain,” according to the columnist.

“We’ll see how this plays out, but no good is going to come from it,” he said.