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Knox County Commission tables interim 2026 operating budget and delays decision on pay increases
Summary
After extended debate over whether an interim budget would lock in last year’s line items and how to cover pay increases, the Knox County Commission voted to table the interim-budget measure and postpone a decision on CPI/step adjustments until January while staff and department heads firm up funding plans.
Knox County’s three commissioners met Dec. 16 for a special session to consider using the 2025 adopted budget as the county’s interim operating budget beginning Jan. 1, 2026, and whether to continue scheduled CPI and step pay adjustments during that interim period. Chair Grace Smith opened the debate and, after extended discussion of funding constraints, moved to table the interim-budget item until the commission’s January meeting.
The draft measure would have the county operate temporarily under the 2025 adopted budget while the full 2026 budget is finalized. "I was in shock because this says, basically, we're gonna do exactly what we did in last year," Chair Grace Smith said, arguing that the proposed language could prevent the county from accommodating necessary pay and benefit increases tied to union contracts and rising costs.
Kathy, a county staff member handling finance analysis, told commissioners that roughly "about 308,000 uncovered" would remain if 2026 increases were applied across departments and that communications accounted for the largest portion of that shortfall. Kathy identified potential offsets — a $67,000 lease saving no longer needed in 2026 and a $191,000 capital share originally budgeted for vehicle purchases — but warned some of those funds may already be earmarked elsewhere.
Commissioners discussed practical alternatives, including adopting a shorter (six-month) interim budget, conducting quarterly check-ins, and requiring department managers to minimize discretionary spending such as overtime and training. Several commissioners urged that department heads attend early-January meetings to present coordinated strategies and to ensure that any decision on raises would not push undesignated or contingency reserves below prudent levels.
A motion to table the interim-budget item until January carried unanimously. Commissioners also retabled a separate but related question — whether to authorize CPI and step adjustments to begin Jan. 1 — so staff, the sheriff’s office and department managers could reconcile departmental capacity to cover increases and potential interdepartmental transfers.
The commission left the matter pending with direction to county administration and finance to work with department heads and to return with clearer plans at the January meeting.
