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New Kingsport budget proposal includes 13-cent property tax hike

June 3rd, 2014 11:54 pm by Matthew Lane

New Kingsport budget proposal includes 13-cent property tax hike

KINGSPORT — The BMA took the first step in approving the 2015 budget Tuesday night, one that includes a 13-cent property tax hike, no garbage collection fee and slight increases in the water and sewer rates.

But the vote did not take place quickly nor quietly as the BMA and a dozen members of the public spent more than an hour during Tuesday's regular meeting discussing the budget, the property tax increase and the challenging financial state of the Model City.

Kingsport faces a $2.3 million shortfall in its 2015 budget, and a recent option being considered to balance the budget involved an additional $1.4 million in cuts (including six positions), raising property taxes by four cents, creating a $5 garbage fee and not filling six vacant positions.

However, after receiving more than 100 emails and calls from the public during the past two weeks, with the overwhelming majority being opposed to the creation of a garbage fee, the BMA agreed on Monday to drop the new fee and instead go with a 13-cent property tax hike — something a majority of home owners in Kingsport would be financially better off with.

The BMA voted 5-0 to approve the 2015 budget on first reading Tuesday night with Aldermen Tom Parham and John Clark not in attendance. Before the budget was approved, the BMA had to amend the budget to remove the garbage fee and change the property tax increase from four cents to 13.

That amendment was approved on a 3 to 2 vote with Alderwoman Colette George and Alderman Jantry Shupe voting "no."

George explained her vote by saying the people who spoke to her and called her supported the "balanced approach" of the four-cent increase and garbage fee. Shupe, who did not attend any of the budget workshops this year, said he listened to the hundreds of phone calls and visits from people about the issue.

Shupe said there are too many elderly people on fixed incomes in Kingsport for him to support the property tax increase.

Kingsport's budget requires a second vote by the BMA, which is scheduled for June 17. If approved, Kingsport's property tax rate will be $2.07 in Sullivan County and $2.01 in Hawkins County.

More than an hour of discussion and public comments took place prior to Tuesday's vote with people running down a list of complaints and concerns, ranging from property taxes to Kingsport's spending habits, to a number of hot-button issues such as the aquatic center, winery and annexation.

"I know how hard it is to raise taxes," said local developer and former Kingsport alderman Dave Clark. "I know you can (find cuts). Any of you who has been in business knows you can. (City staff) can find efficiencies and they can do it without reducing services. You say the only way is by cutting positions or services. I know that's not the case."

Like many cities across the country, Kingsport has been hit hard by the recent recession with revenues down by more than $5 million. Since the recession hit, Kingsport has seen property taxes come in $1.4 million less than expected, sales tax collections $1.8 million less and interest earnings dropping $1.2 million.

Dave Clark said the financial problems are not going to go away this year.

"If you bind yourself today with a tax increase, you won't have any flexibility tomorrow when you really want to invest," he said.

A Colonial Heights resident annexed two years ago asked the BMA to consider property owners like himself, living on a fixed income and recently having to pay city taxes due to annexation.

"You hit our area with a tax increase two years ago, and here you come hitting us again," he said.

Doug Releford said he was concerned about no money in the budget for the school system.

"Don't come back next year and ask for more money to take care of the schools. If you're going to do it, include it in this year's budget," Releford said.

Kingsport City Schools requested $775,000 in new operating funds and $750,000 to purchase new computers for students.

No additional money for the school system is included in the proposed budget, but the BMA has asked City Manager John Campbell to continue to work to see if any money can be found for KCS.

Vice Mayor Mike McIntire said the budget is still a work in progress and staff will continue to look for ways to cut. Alderman Tom Segelhorst said the city should continue to look for ways to give the school system some additional money.

Bond Porter, who described himself as a small government guy, said his problem with Kingsport had to do with a perceived philosophy of not living within its means.

"Building swimming pools is good when all of your roads are paved," Porter said. "You don't build a swimming pool in the back yard when your roof is leaking."

Dwight Smith said it's time for Kingsport to close its pocketbook.

"When you go through a recession, it's time to cut back, it's time to slow down and you have to pay as you go," Smith said.

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