Over the next couple of months, City Manager Jeff Fleming will hear detailed budget requests from each of the departments within the city. The budget will be reviewed in March and April, and then in May, Fleming will present a balanced budget with no property tax increase to the BMA.
The proposed budget will include minor rate adjustments for utilities, modest fee adjustments where justified and raises for employees based on performance reviews.
The BMA will vote on the budget in June, send it to the state later that month, and the new fiscal year will begin July 1.
On Monday, Fleming presented the BMA with a list of financial assumptions for the upcoming budget year.
State shared revenue
The issue: Tennessee made changes in 2012 that permanently reduced recurring revenue to local governments. Taxes were reduced or eliminated on groceries, inheritance and income on stocks/bonds.
The result: For Kingsport, the changes resulted in the loss of nearly $1.3 million.
The issue: Not all news was bad for Kingsport at the state level as legislators did increase the tax on fuel in 2017.
The result: Kingsport will see an additional $500,000 in state street aid for local roads, plus increased state funding on state routes.
The issue: A lawsuit regarding whether cities are obligated to share mixed drink taxes with counties worked its way through the courts. A recent appellate court case ruled in favor of Kingsport, and city officials are waiting to see if Sullivan County appeals.
The result: Kingsport's exposure in this matter is approaching $2 million.
The issue: Tennessee made changes to allow one-time monies to be appropriated for education without the requirement of maintenance of effort. Another lawsuit allows counties to accrue unspent money from annual county property taxes and spend it only on county schools.
The result: Sullivan County reduced 5.5 cents of the county tax rate away from schools in 2017, resulting in an annual loss of $644,882 to Kingsport City Schools. Another $1.13 million of county funds were not shared with KCS for capital facilities.
The issue: Tennessee is heavily reliant on sales taxes, and Kingsport experienced a loss of sales tax revenue in recent years, mostly due to online purchases.
The result: Kingsport absorbed a $650,000 loss in sales tax collections in 2017 and reset the 2018 budget to 2015 levels.
The issue: To offset rising expenses and unexpected external factors, Kingsport has become more efficient by investing in technology, vehicles, and resources to allow employees to work smarter.
The result: Kingsport rolled out the YourGOV app, which allows residents to self-report public works issues using a desktop or mobile device. The city also continues to use automated collection trucks for garbage, trash, leaves and recycling, and automated utility meter-reading devices.