KINGSPORT — Kingsport is in a strong financial position for 2022-2023.
Kingsport has posted a budget surplus of 2% for the second consecutive year.
John Morris, Budget Director, stated that “we’re in fairly good financial shape” and that once we have paid off the end-of-the-year projects, we should be in great condition for the remainder of the year.
According to city records, the surplus budget will exceed $2.75million in the next fiscal year. This is after the City had a surplus of $2.1 million in its last fiscal year.
Officials from the City claim that property tax collections have increased by $1.58million, while sales taxes collections are rising at record rates of more than $1.9million.
John Morris, the City’s budget director, stated that December sales tax collections exceeded $2 million for the first time in history.
Officials from the City said that a large portion of the tax collection growth is due to the increase in people moving into the area, inflation, and the sales tax collection from internet sales.
Kingsport estimates it will collect $41.7million in property taxes and $18.7million in local option sales tax for 2022 fiscal. Together, these two revenue sources account for 72.31% of the City’s total revenue during the fiscal year.
Projections for property taxes show that they will be about 2% higher than the budget. However, local option sales taxes collections will rise 10% above budget.
According to the BMA, Kingsport will grow 2% to 4.4% ($1.7 million to $3.5million) in the 2023 fiscal year. The new fiscal year starts July 1, 2022.
Officials from the City say there will be challenges in budgeting for 2023. These include the ongoing supply chain problems, rising inflation, and increasing the city population.
Morris stated, “As we see population growth over five years that will also increase our sales tax collection in Kingsport,” Kingsport will be able to thrive in the future if it has strong financial management and that growth is accompanied by strong financial management.
However, the City is also receiving federal funding of over $10 million, including American Rescue Plan Act money.
The City had begun planning late last year to spend the money that arrived in May. The board approved many expenditures, including improvements for police, fire, and other capital improvement projects.
These included the completion of the fire training center, repaving in Lynn Garden improvements to Allandale, the Senior Center, and stormwater improvement along Main Street.
The board met again in February to finalize the next tranche of financing, expected to arrive in May.
Many board members discussed the possibility of using the money for a larger project than the City could normally fund. Many projects were on the agenda, including library renovations, completion of parks, Brickyard Park, and Cement Hill, general improvements to parks, continued development of Academic Village, and construction of a new Fire Station No. 2.
