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Johnson City presents FY2026 budget in first reading; no tax increase proposed
Summary
City staff presented the first reading of the fiscal 2026 budget on June 5, holding a public hearing. The proposed budget of about $120.1 million for revenues includes no recommended tax increase; commissioners set schedule for remaining readings and public input.
City staff presented the first reading of Johnson City’s fiscal year 2026 budget at the June 5 commission meeting and opened the required public hearing on the proposal.
City Manager Kathy Ball and budget staff said the total proposed revenue across all funds is approximately $120.1 million, with about 64% coming from property and sales tax. Budget Director John Stedman said the recommended projection for sales tax increases is 3.1 percent over the current year’s projection; the city used the University of Tennessee economic outlook as a benchmark.
Dustin Thompson, the city budget director, and Stedman said the proposed general‑fund budget of roughly $92.9 million keeps the city from drawing on fund balance to balance the operating budget and does not include a proposed property‑tax increase. Stedman noted that sales‑tax revenue has grown substantially since 2020 and that hotel/motel tax and other local receipts have rebounded.
The presentation highlighted capital projects tied to the commission’s strategic priorities, including West Walnut improvements, roadway widenings and signal work at Sam Jenkins and Suncrest, a new connector road, downtown crosswalk lighting, the fire training center and continued work on Towne Acres School design. The proposed pay plan would provide a 3 percent cost‑of‑living increase and 0–1.5 percent merit adjustments, with an average employee increase near 4 percent for some employees, staff said.
During the public hearing, residents asked for more transparency about the community survey that informed priorities and whether budget figures were adjusted for inflation. Budget staff said sales‑tax numbers shown on trend charts were nominal dollars (not adjusted for inflation) and that the community survey posting would be checked for public access. One resident urged allocation of new revenue to public‑health and regulatory work tied to the moratorium item discussed earlier.
Commissioners scheduled a special called meeting for further budget consideration and set the third reading and final adoption for June 19. A second public hearing on the budget is required on first reading and was conducted that evening as part of the presentation.
