A tax hike in Kingsport is not necessary this year
May 22, 2018 at 12:45 PM
Some communities in the region are facing tough financial challenges, but fortunately for city residents, Kingsport isn’t one of them, despite the fact city leaders have spent a lot of time debating budget pocket change.
The proposed city budget for next year shows an imbalance of but $644,000 in a budget of more than $260 million.
Among proposals to fix that situation are that taxes be raised to handle that little bit of money. But even City Manager Jeff Fleming, who presented the Board of Mayor and Aldermen various options, doesn’t see a need for that.
There are three options. One would reduce special programs by 20 percent and cut One Kingsport funding by a third. Another would raise taxes by 2 cents and cut special programs by 10 percent. And the last would just raise property taxes by 4 cents.
Mayor John Clark was clearly upset over this situation as BMA members reviewed the options. But not so much over the shortfall as for the reason for it. And that is a decision by the Sullivan County Commission to withhold funds from the city that it historically has received. Commissioners voted last year to cut back on what it shares with its cities despite the cities providing the majority of county taxes.
The good news is that a majority of the BMA opposes raising taxes. Residents are still fuming over a new tax in the form of an $8-per-month sanitation fee that raised several million in new revenue for the city, as well as a hidden tax that came about by the city collecting $3.8 million in a new power franchise agreement with Appalachian Electric Power. In turn, AEP simply raised rates for city customers to recover it.
On the other hand, the city should be cautious about artificially holding the line on property taxes, which is the city’s main source of revenue.
We have too many examples of local governments preaching the no-new-taxes sermon to taxpayers year after year, despite that the cost of running towns, cities and counties increases every year. This leads to an inevitable day of reckoning when residents are hit with massive property tax increases.
It’s better for taxpayers when local governments raise property taxes by incremental amounts as necessary.
It’s certainly easier to defend a small hit on the tax rate.