Mayor's budget includes property tax increase for Knoxville

Mayor Madeline Rogero's budget proposal includes a property tax increase for Knoxville residents.

She is proposing a .34 cent tax increase, which would mean about $7 a month for a home appraised at $100,000.

Rogero noted that the last tax increase was ten years ago, when Bill Haslam was mayor.

We're taking a closer look at the budget, and will update this story with more information soon.

Previous story

(WBIR) Knoxville Mayor Madeline Rogero's budget for the upcoming fiscal year must somehow close a roughly $10 million gap tied to rising personnel and pension contribution costs, and yet also find ways to pay for capital improvement projects and reinvestment initiatives designed to enhance the city's quality of life, she acknowledged to WBIR 10News.

To do that, the mayor will more than likely be forced to either raise taxes, dip into the city's reserve fund or cut services, she said.

Rogero will unveil her proposed budget for the upcoming fiscal year at noon Thursday at Christenberry Ball Field in North Knoxville. The City Council will then hold budget hearings on May 21 in the Main Assembly Room of the City County Building. The spending plan must be approved by June 30, the last day of the current fiscal year.

"We've had some challenges in addressing the budget this year," Rogero said. "It's no surprise we have a big unfunded pension liability . . . and it's something we're obligated for and something we have to address."

Residents in 2012 approved changes to the city's pension plans, voting in a hybrid plan that combines a traditional defined benefits pension with a defined contribution component.

Still, the city isn't expected to see any savings for decades.

In the meantime, the budget that Rogero will present on Thursday has to cover some $23.4 million in pension contributions – up $7.4 million from the current fiscal year.

The budget also must include an additional $1.7 million to cover a 2.5 percent raise for roughly 1,600 employees, a salary increase that is guaranteed each year under the city's code.

And, the city needs to find another $700,000 for increased health care costs.

In addition, Rogero noted that "inflationary costs" tied to buying equipment, supplies "and quite a bit of purchasing that we have to do to run a government this size" also have jumped.

"On the capital side there are many projects that people want in our city – things like greenways, sidewalks and bicycle facilities, road improvements, intersection improvements, street paving, garbage pickup – all the different types of things that we provide to the city," the mayor said. "So, we look at the operating side and the capital side . . . and from there we look at what is realistic and try to establish a budget around that."

The mayor met this week with 10News to talk about the budget, but remained tight-lipped for the most part about what residents can expect.

She said officials faced a number of challenges, including flat sales and – for the most part – property tax revenues.

Still, Rogero said she wanted to continue the campaign promises she made two years ago: "Focus on a thriving business climate and good jobs; on strong and safe neighborhoods; and a more sustainable living green and working green in Knoxville; and enhancing the quality of life."

"The budget address is the one opportunity the mayor has annually to really lay out a vision for what our city should be and what we want to accomplish and also a realistic picture of where we are," she said, declining to elaborate until Thursday about what residents can expect.

The mayor said she plans to keep the city's reserve at 25 percent of the budget – roughly $50 million for this year. It currently stands at $60.1 million, but she declined to say whether she would dip into it.

Rogero also declined to say whether she would raise taxes, cut services or take out more debt.

Last year the city issued $31.4 million in bonds to pay for four projects, including a Public Works Complex, demolition work at Lakeshore Park, Knoxville Zoo improvements, and construction initiatives to combat flooding problems on Prosser Road.

Knoxville's property tax rate stands at $2.3857 per $100 of assessed value, which is the city's lowest since at least 1987. That means the owner of a $130,000 house pays $775 in city property taxes.

Earlier this year, the mayor instructed her department heads to give her two budgets – one that acts as a "continuation budget" and stays the course and another that reflects a 6 percent reduction.

Public safety accounts for almost 50 percent of the city's general fund, so any overall cuts would more than likely hurt the police and fire departments.

The general fund, which covers much of the city's day-to-day operations, currently stands at $185 million.


To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment