Kingsport City Council has taken significant steps to address its financial challenges during the recent BMA meeting held on June 3, 2025. The council approved a general fund budget of $110,874,600, which includes a proposed property tax increase of approximately 9.8%. This decision comes in response to a substantial revenue loss of over $3.8 million due to a state-mandated property appraisal that negatively impacted the city’s finances.

City officials emphasized that the budget process is a year-long endeavor, with discussions beginning as early as January. The council has been working diligently to balance the budget, which has been particularly challenging due to inflation and stagnant sales tax revenues. The proposed tax increase is aimed at restoring lost revenue, maintaining competitive employee pay, and funding essential infrastructure projects, including road paving and school facility improvements.

During the meeting, city manager Chris McCartt highlighted the need for the tax increase, stating that previous one-time funding sources, such as American Rescue Plan money, have been exhausted. The budget prioritizes restoring operational funding that had been diverted to cover paving expenses in prior years. Additionally, the council discussed the importance of maintaining competitive wages for city employees amid rising labor costs.

Public feedback during the meeting reflected concerns about the tax increase's impact on residents, particularly those on fixed incomes. One resident expressed gratitude for the detailed budget presentation but urged the council to consider the financial strain on vulnerable community members.

Despite the challenges, the council members expressed a commitment to responsible budgeting and acknowledged the necessity of the proposed tax increase to ensure the city can continue to provide essential services and maintain infrastructure. The budget will undergo a second reading on June 17, 2025, before final approval.

In addition to the general fund budget, the council also approved budgets for the water and wastewater utilities, which are designed to be self-sufficient and not reliant on property tax revenues. These budgets include necessary rate adjustments to ensure compliance with state regulations and to fund ongoing capital improvements.

As Kingsport navigates these financial hurdles, city leaders remain focused on strategic planning and community engagement to foster a sustainable economic future.