Why Knox County Mayor Glenn Jacobs won't consider a property tax hike in uncertain times

Tyler Whetstone
Knoxville News Sentinel

It’s been over 20 years since Knox County has had a tax increase, and a global pandemic — which has ushered in waves of budget uncertainty — won’t likely change that anytime soon.

Sitting in his sixth-floor conference room overlooking the Tennessee River the day after a late-night budget vote last week, Mayor Glenn Jacobs dismissed the idea of a property tax increase to help the county over the coming months.

“Here’s the issue: When you start raising property taxes, you actually can have a negative impact on your revenue because that causes more people to be delinquent because they can’t pay them,” he said.

The goal, he said, is to keep money in people’s hands.

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“This is not the time to raise taxes,” he said. “And I understand that, you know, it’s an emergency, but still, you could end up hurting yourself worse because you dampen economic activity, especially when they’re trying to get people to get out and spend more money and that sort of stuff.”

Knox County Mayor Glenn Jacobs walks around office space inside the TVA East Tower in downtown Knoxville on Monday, October 28, 2019.

The previous night, the county commission debated giving 820 Knox County Sheriff’s Office employees a bonus for hours. Ultimately, commission chose to give a $1,500 bonus to each employee over a possible $750 one.

In a normal, healthy budget the roughly $600,000 difference in an $851 million budget wouldn’t have been a sticking point. But COVID-19 has made budgeting a complicated math problem that continues to evolve.

While the county can, and likely will, take the money out of the general fund — also known as the rainy-day fund — that fund is expected to drop precariously low before it builds back up in the fall when property taxes come due.

Jacobs pushed the commission unsuccessfully toward the $750 option with a promise to revisit the amount if the county was in a more secure financial standpoint in the fall. Thursday, he said the commission’s decision adds more uncertainty to the budget.

“I’m concerned about that,” he said.

Knox County Mayor Glenn Jacobs, right, greets Tennessee Gov. Bill Lee, center, and his wife Maria Lee, left, at South-Doyle High in South Knoxville on Friday, February 15, 2019.

The budget uncertainty was why Jacobs chose to furlough hundreds of county employees earlier this year, many of whom remain out of work. Thursday, he said the county would not likely do that again.

He chose furloughs previously, he said, because employees would still be paid through the federal CARES Act and many of the furloughs came from places like the library system, which was forced to close.

“We have to keep Knox County government open and going," Jacobs said. "So, it’s a different situation. We wouldn’t do it, I don’t believe, just to make up revenue. Because people are using the services we have to provide. I think we still have other options we could look at before we do that.”

Ultimately, any budget decision is made by the commission. Some members entertained the thought of a tax increase to help the county pay for new schools last year, but the discussion didn’t go very far.

If the commission were ever to vote to implement a tax hike it would take eight votes to override a Jacobs veto. Given the current makeup of the commission, this is highly unlikely to happen.

Still, even though the budget is down from the nearly $900 million officials once predicted, the county is still funding three new elementary schools and there are no wholesale cuts planned.

Jacobs said he was satisfied with the end result, though not happy about how COVID-19 put them in this spot.

“I think the fact that we’ve been fiscally conservative through the years is benefiting us now because we’re not having to make wholesale cuts like we’d have to otherwise — or raise taxes tremendously like we would otherwise,” he said.

“No matter what, we’re going to get through it. I mean, it might be challenging at times, but 2020 has just been one heck of a year. But we’re resilient. Knox County is resilient. We’ll be OK.”

Property tax rates

Earlier this month Nashville/Davidson County increased its property tax by 34%, a substantial hike, though the rate is still relatively low. The Metro Council increased the rate from $3.155 to $4.221 per $100 of assessed value.

Still, Nashville's situation is very different than Knox County's. Officials hope Nashville’s increase can calm the perfect storm hitting the city: a mixture of the COVID-19 pandemic’s impact on local finances and the city’s well-documented, ballooning debt of the past 10 years.

Knox County and Knoxville's rates are:

  • Knoxville: $2.4638 per $100 assessed value
  • Knox County: $2.12 per $100 assessed value
  • City residents pay the combined rate of $4.5838

Email Tyler Whetstone at tyler.whetstone@knoxnews.com and follow him on Twitter @tyler_whetstone. If you enjoy Tyler's coverage, support strong local journalism by subscribing.