Knox County proposes FY27 budget with no tax increase; commissioners press on warming centers, convenience centers and school debt

Finance Director Chris Caldwell told the Knox County Commission on June 1 that Mayor Jacobs’ proposed FY27 operating budget includes no tax increase and holds the property tax rate at 1.554 until reappraisal in August. “This budget does not have a tax increase. It keeps the property tax rate constant at 1.554,” Caldwell said, summarizing a plan that adds about $31 million in spending overall (roughly 2.7%) and a general fund increase of about $10.3 million (4.3%).

The proposal includes an approximate 3% pay raise for county employees and a five‑year capital improvement plan that shows about $334 million for county and school infrastructure, though only the first year is adopted now. Caldwell said defined service contracts in the general fund continue at prior funding levels and that the county seeks to be transparent about new and moved line items.

Commissioners used the hearing to press for details. Commissioner Russell asked about a new $500,000 line for EMPATH (department 1013367). Caldwell said the county and city, working with the state and local hospitals, established a short‑term mental‑health inpatient center three years ago; the state provided most of the capital and some initial operating support and the county is covering a shortfall during the facility’s early operations.

Russell also questioned a roughly $180,000 increase in parks spending; Caldwell said most of that change reflects the proposed pay increase and related benefits rather than new operational programs. A separate new line for solar maintenance (department 1016033) was added to make both revenue and expense explicit instead of absorbing the maintenance in other departments.

The budget shows a sharp rise in some building operations lines (PBA), which Caldwell described as a correction to prior years’ underbudgeting: “We are getting the budgetary expense for building expenses to what it truly is,” he said, adding the county historically used year‑end transfers to cover shortfalls and is now budgeting more accurately to reduce those transfers.

Education funding and debt were a central focus. Commissioners pressed on TISA estimates and average daily membership (ADM). Caldwell and Ron McPherson of Knox County Schools said the state TISA estimate used during budget preparation was about $341.6 million for 2027 but that the figure is an estimate that can be adjusted quarter to quarter and is not finalized until the state’s late‑June numbers. Caldwell and commissioners also discussed a projected net $63 million increase in bonded debt for 2027 and why debt service remains flat from '26 to '27; Caldwell said the county delayed issuing some bond series to meet IRS spend‑down requirements and is sequencing future issues (expecting FY25 bonds to be sold in spring 2027 and FY26 in spring 2028) while managing reserves to absorb near‑term peaks.

Solid waste and convenience centers drew extended attention after Caldwell said the county’s hauling contract roughly doubled, increasing convenience‑center costs by roughly $1.2 million. Caldwell said the county operates seven convenience centers though state law requires three. To balance the solid waste budget the recommended FY27 plan uses a $600,000 transfer from the general fund and additional transfers from engineering and public works; Caldwell said a consultant will perform a waste‑stream study and return options in 2–4 months ranging from consolidating centers to limiting construction and demolition (C&D) receipts.

Caldwell also described a new internal service fund for records management to charge departments for box counts and to begin digitizing county documents held at Knox Central, saying the change is intended to make departments cognizant of storage costs and reduce paper volume over time.

The commission closed the hearing with a reminder that the next budget public hearing is scheduled for June 15 at 3 p.m. and approved a motion to adjourn by voice vote.