Is Nashville's Revenue Stream Diverse Enough to Ride out the Housing Slump?

While Metro's FY2008 budget reports that Nashville has the lowest property tax rate of Tennessee's four major cities, it also indicates to me that the local government relies too exclusively on property taxes compared to other major cities. The Finance Department's report says that the "largest single source of operating revenue is the property tax." According to the report's summary (A-3), almost 50% of total revenues were from property taxes.

Compare that number to variations elsewhere:

although all cities are impacted by housing price declines, each city varies in the amount of money it generates from property taxes. Dallas, for example, gets 42% of its municipal revenue from property taxes; Philadelphia, just 6%. Moreover, cities in California may not be hurt as much as one would think because increases in home appraisals have been limited under the state’s famous Proposition 13.

So, Nashville seems relatively overreliant on property taxes compared to other cities that fund their services from other sources.