In a move that could see Knoxville residents paying a bit more on their shopping tabs, the Knoxville City Council approved the first reading of Mayor Indya Kincannon's proposed sales tax increase last night. The increase, by a half-cent to the Local Option Sales Tax, is estimated to rake in an additional $47 million annually. This revenue aims to improve local amenities and infrastructure amidst the city's growth.
As reported by WVLT, the proposed increase would bump Knoxville's sales tax from 2.25% to 2.75% and is designated for the Five-Year Neighborhood Investment Plan. The plan includes new sidewalks near schools, park and greenway repairs, road paving, and the development of 1,000 affordable housing units. The council's decision, which passed 7-1 with one abstention, will put the referendum on the ballot this November, putting the power into the hands of voters.
During the meeting, several council members expressed their views, providing a mixed bag of support and concern. Council Member Amelia Parker, as noted by WBIR, opposed the move citing that the tax increase is regressive and more burdensome for those with less income. "What I'm hearing from constituents is concern about the cost of living. I'm not hearing about a push to prioritize the spending that the city has lifted up under this tax increase," Parker said. In contrast, Council members Gwen McKenzie and Seema Singh voiced their support but sought additional clarifications on the spending of the funds.
Sales tax increases are often a contentious issue, touching upon the delicate balance between civic enhancement and the financial strain on residents. With the potential infusion of $47 million annually, Mayor Kincannon emphasized to WATE that at least "50% of that sales tax revenue is generated from people not living in the City of Knoxville," possibly cushioning the perceived impact on locals. A second vote is slated for June 24, well ahead of the November ballot where voters will ultimately decide.
The revenue from the tax increase, broken down by WBIR, earmarks around $10 million for parks and an equal amount for affordable housing, among other allocations. Enthusiastic about the projects in her district, Councilwoman McKenzie highlighted the significance of constructing sidewalks around schools, emphasizing the safety of children.
