Kingsport posts strong tax collections in 2022

The City of Kingsport expects to see its tax revenues for the current fiscal year come in significantly higher than what was originally budgeted.

According to city finance officials, Kingsport’s property tax revenues are projected to increase by $1.1 million by the end of the current fiscal year (June 30, 2022). During that same time, local option sales tax collections are expected to come in more than $2 million over the original budget estimates.

In all, total city revenues for the current fiscal year are expected to be 2% higher than the original budget estimates or by approximately $2.75 million.

This is information that was presented to the Board of Mayor and Aldermen during a day-long, strategic planning session held Friday (Feb. 25) at city hall.

“We’re in pretty good shape financially and once we pay off some end of year projects, we should be in great shape for the rest of the year,” said Budget Director John Morris.

During Friday’s meeting, the BMA heard updates from staff on the city’s finances, economic development efforts and goals for the coming year. In addition, city leaders got a first look at the 2023 budget, reviewed a list of possible ARPA-funded projects and went over the city’s long range strategic plan.

Kingsport is estimating it will collect $41.7 million in property taxes for the 2022 fiscal year, along with $18.7 million in local option sales taxes. Combined, these two revenue sources account for 72.31% of the city’s total revenue for the fiscal year.

Property taxes are projected to come in about 2% over budget ($1.58 million), while local option sales tax collections are coming in 10% over budget ($1.9 million).

According to information provided to the BMA, Kingsport can expect to see revenue growth in the 2% to 4% range ($1.7 million to $3.5 million) for the upcoming 2023 fiscal year. The new fiscal year begins July 1, 2022.

City officials say some challenges will play a role in any budgetary estimates for 2023, including the continuing supply chain issues, rising inflation, any growth in the city’s population and the expansion of city services. “As we experience population growth over the next five years, that will also grow our sales tax collections in Kingsport,” Morris said. “That growth, coupled with strong financial management, will put Kingsport on sound footing for the future.”