Knox County and Knoxville, however, should be fine. For now.
Still, local mayors are not happy with the cut.
At issue is a tax that affects about 2 percent of the state households and mostly its wealthiest residents. The state taxes income from taxable stock dividends and certain interest.
Knox County the past five years has received between $2.2 million and $4.5 million from the tax. Knoxville during the same time period has received between $4 million to $12.5 million.
“I am opposed to the move to cut and eventually abolish the Hall tax,” Knoxville Mayor Madeline Rogero said. “The City of Knoxville budgets about $4 million a year for Hall tax revenues. That’s the equivalent of about 10 cents on our property tax rate. In order to give what amounts to a small tax cut for the wealthiest people in the state, our Legislature is shifting millions of dollars a year in public services onto the backs of middle- and lower-income residents.”
Any amount that comes in over what the city budget gets invested directly into needed public infrastructure, like sidewalks, bridge repairs, and streetscapes.
The bill state lawmakers approved on Friday will cut the income tax this year and repeal it in 2022.
For Knox County, the immediate cut is expected to be as much as $500,000.
“In politics people are always taking credit for things but you’re not getting the full story,” Knox County Mayor Tim Burchett said. “It sounds great to eliminate a tax – but you’ve got to realize – it only affects 1 percent of the population, usually the wealthiest of our population. It’s serious business. Some of these smaller communities – it could really hit them hard. And some of the bigger ones rely more heavily on it – some of our more wealthy counties.”
When asked whether the hit would affect services, Burchett said he didn’t think it would for Knox County.
“That’s why I’ve been fiscally conservative all these years,” he said. “We made cuts and we have monies that we can apply to other things. We’re not going to cut services mainly because our fiscal budgets have been incredibly conservative, and (the Knox County) Commission has done a good job on holding the line on spending.”
But, the mayor said no state legislators contacted local officials about the bill.
BY THE NUMBERS
Below is a look at the revenues received by the county and city during the past five years.
Knox County Halls tax revenues
- 2015: $4.5 million
- 2014: $2.2 million
- 2013: $3.2 million
- 2012: $2.9 million
- 2011: $2.7 million
- 2015: $8.4
- 2014: $9.2
- 2013: $12.5
- 2012: $3.9
- 2011: $7.3