Knoxville mayor wants $15/hour increase in minimum wage and property tax

In his first in-person State of the City address on Friday afternoon, Knoxville Mayor Indya Kincannon announced what could be his flagship proposal — a $15-an-hour minimum wage for workers in the city and general increases — but coupled with a demand for a 50-cent increase in the property tax rate, the largest proposed rate increase in decades.

About 80% of new revenue from the proposed increase will be used for employee compensation, which the city estimates will cost about $16 million. If approved by city council, the increase would bring the city’s property tax rate to $2.96 per $100 of assessed value.

The city estimates the proposed rate will cost an additional $10 per month for properties valued at $100,000. Owners of properties worth $200,000 would pay around $20 more per month and $52 more per month for properties worth $500,000. The median home price in 2021 was $287,000, according to the Knoxville Area Association of Realtors.

Knoxville Mayor Indya Kincannon has offered to pay city workers at least $15 an hour to help with recruitment and retention in a competitive job market.

Still, with property reassessments still coming from the Knox County real estate appraiser, the estimated certified tax rate is expected to be the lowest in the city since at least 1974.

“I’m not willing to sacrifice Knoxville’s safety and quality of life by being wise and crazy,” Kincannon said. “We need high-quality basic services and infrastructure to keep Knoxville’s positive momentum going. We can’t print money and we can’t go into the red and we can’t use our account. savings for recurring expenses.”

Overall, the proposed budget of $434.1 million is up from last year’s $384.2 million that council approved as the city began shedding its webs. COVID-19 spiders. Friday was the first such in-person speech since 2019 due to the pandemic.

Among other changes, Kincannon proposed $77 million for the city’s capital fund, what Kincannon called its parks, pavements and drains plan. She also touted another injection of dollars from the city toward affordable housing.

She did not, however, use the speech given on the campus of the future police headquarters to name the city’s next police chief. Eve Thomas’ last day as chief is May Day and Kincannon reiterated his intention to appoint a new chief by the end of the month.

A tax increase was coming

The city’s budget crisis is partly of its own making and partly due to forces beyond its control.

Related:Knoxville mayor likely to seek property tax hike to ease budget crisis

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Earlier this year, Susan Gennoe, the city’s chief financial officer, said next year’s budget (the budget Kincannon proposed on Friday) is “the year of prudence” in which the fund balance, known as a rainy day fund, is shrinking below what the rating agencies think. is secure.

Knoxville Mayor Indya Kincannon delivers her State of the City address Friday at the new Public Safety Complex in North Knoxville.

In the end, the city spent more than it took in and did so by drawing on the rainy day fund. It’s not unusual for a city, but it’s not something sustainable in the long run.

With inflation through the roof, it stands to reason that the city would benefit from something like the county assessment process, which raises bills throughout the county, but the property tax rate is lowered, which means that the city does not benefit from inflation. City leaders are quick to say that homeowners pay proportionately less today than they did a decade ago, after inflation and revaluations are taken into account.

So what was coming was a property tax increase, a reduction in municipal services, or both. And with 2023 being an election year, Kincannon had few good options. It is politically viable. Mayors Bill Haslam (35 cents) and Madeline Rogero (34 cents) passed a raise early in their terms and both easily won re-election.

From left, former Knoxville Mayor Madeline Rogero, University of Tennessee Chancellor Donde Plowman, Knoxville Mayor Indya Kincannon and State Senator Becky Duncan Massey take a photo together after the speech on the Kincannon town state.

During her speech, Kincannon asked a series of rhetorical questions about whether the city should cut services, stop building or, she said, raise new revenue to fill the void.

“So please know that this decision was not taken lightly,” she said. “We have tightened our belts and looked for areas to reduce but we have to meet the needs of our city.

The city has consistently received the highest or highest bond ratings from rating agencies Fitch, Moody’s, and Standard and Poor’s. He is still considered financially sound.

Wage increases in a competitive labor market

Earlier this year, Kincannon announced it would propose a minimum wage of $15 an hour and a general raise of 6% for city employees. The push comes as a new compensation study found that city wages, overall, are 10% below market rate.

Kincannon said the increases would cost the city about $16 million. The increases will not be intended for municipal executives.

Fulton High student Imani Anna performs the national anthem during Knoxville Mayor Indya Kincannon's State of the City Address.

“It’s not just the right thing to do for our hard-working employees,” she said. “It’s the right thing to do for all of us who work and live here and rely on our police, firefighters and non-uniformed workers to keep our neighborhoods safe and quality of life.

“Our first responders always have our backs and now it’s time we had theirs,” she continued.

The city also hopes the money will help woo employees of the city, which currently has more than 140 openings, including about 50 openings to the police department.

Other budget notes

Investing $8.6 million in transportation infrastructure at specific high-priority locations, including funds to create separate bike and pedestrian lanes on popular routes:

  • Washington Pike
  • Neyland Drive
  • East Knox Greenway, connecting Harriet Tubman Park and the Knoxville Botanical Garden and Arboretum

Investing $2.3 million in fire and police vehicles and equipment, including creating what the city calls a Real-Time Crime Center:

  • Providing nearly $5.8 million to key public safety partners including Behavioral Health Urgent Care Center, Family Justice Center, McNabb Center, Young-Williams Animal Center and E-911
  • Provide $1.5 million in community agency grants to local nonprofits providing services ranging from mental health and addiction treatment to youth programs

Investing over $20 million to upgrade aging stormwater and utility infrastructure (funded by the American Rescue Plan Act):

  • This includes priority investments, such as the Cherry Street Drainage Project ($2.3 million), Flood Mitigation and Resilience ($1.3 million), Dilapidated Pipe Remediation ($1. million), the Baum Drive improvement project ($700,000)
  • It includes an additional $2.75 million for water quality improvements, stream restoration (including restoration of 1,000 linear feet of streams in Mary Vestal Park)

Investing $10.8 million to increase the availability of affordable housing and provide pathways to housing and stability for people experiencing homelessness:

  • $4.2 million – Western Transformation Plan for Western Heights
  • $1.6 million – First Creek at Austin Homes
  • $2.5 million – Affordable Rental Housing Development Fund
  • $1 million – local funds (supplemented by $1.3 million in federal aid) supporting homeless services, including street outreach and the Hearth, a low-barrier shelter
  • $1.5 million – federal funds for permanent supportive housing

Invest some $10.2 million in park improvements, including what the city calls “significant investments” to:

  • Augusta Quarry / Fort Dickerson Park
  • Lakeside Park
  • Ijams Nature Center
  • Lonsdale Park
  • Williams Creek Golf Course
  • urban desert