America's Property Tax Advisor

Knoxville Faces Property Tax Increase

BY LEE WHARTON, MEMPHIS, MARCH 2022

Knoxville, like many other cities across the nation is facing a budget crunch. Leaders are facing options of raising property taxes, cutting services, or a mixture of both to keep the city in good, long-term finance shape.

 

No Surprise

 

During last year's budgeting process, the city laid out how it was spending more than it was taking in. With increased inflation and a nationwide labor shortage, costs are increasing across-the-board.

 

The city's financial predicament is at a point where decisions need to be made. The 2023 fiscal year, which begins July 1 is the "cautionary year" in which the rainy-day fund shrinks below what rating agencies think is safe, Knoxville Chief Financial Officer Susan Gennone told the Knoxville News Sentinel.

 

Financial Obligations

 

Even in good fiscal years, expenses often outpace revenues, according to Chief Operating Officer David Brace. "We are a service organization so this can happen," he said.

 

A big part of the current budget shortfall is an uptick in unfunded pension obligations. There is also an increase of $6.1 million forecast over the next five years and roughly $1.1 million a year in debt payments for the city's new safety center complex. In addition, the city and county are splitting the cost of the $74.5 million Tennessee Smokies stadium for the next ten years.

 

Adopting the budget and setting the tax rate is a process. Taxpayers are encouraged to participate in public hearings in the months ahead.

 

Budget Calendar

 

  • April 22, 2022 - Mayor's State of the City Address and Proposed Annual Operating Budget released

  • May 3, 2022 - City Council First Reading of Proposed Budget & Tax Ordinances

  • May 12-13, 2022 - Legislative Budget Hearings & Public Hearing

  • May 17, 2022 - City Council Second Reading of Proposed Budget & Tax Ordinances

  • May 31, 2022 - City Council First Reading of proposed Capital Improvement Program from Knoxville-Knox Planning Commission

  • June 14, 2022 - City Council Second Reading of proposed Capital Improvement Program from Knoxville-Knox Planning Commission

  • June 15, 2022 - Last Possible Day to Approve Budget / Tax Ordinances

  • July 1, 2022 - New Fiscal Year Begins