KNOXVILLE - Knoxville Mayor Indya Kincannon today proposed a balanced, no-new-taxes $499 million net budget that invests strategically while emphasizing core services.

“I am proposing a budget that’s lean but continues to prioritize public safety, affordable housing, parks, and high-quality people-focused services,” Mayor Kincannon said.

“At the same time, this budget represents a forward-looking commitment to great public spaces, quality of life, job creation, and proven partnerships that get results.”

Mayor Kincannon presented her seventh budget and State of the City Address at the Urban Wilderness Gateway Park. The nexus of trails and the unique playscape with boulders and native plantings at the gateway park paired well with the Mayor’s give-away of pine saplings in celebration of Arbor Day.

The City’s property tax rate remains unchanged at $2.1556 per $100 of assessed value – the lowest tax rate since 1974.

Kincannon’s proposed budget reflects the realities of inflation, rising operational expenses, and slowing revenues.

As examples of the budgetary challenges: Sales tax revenues are forecast to grow by 2.2 percent, while inflation is anticipated to hover at 3 percent.

The expected rate of return on pension investments has been dropping in accordance with the results of a 2022 actuarial study, which lowered the expected rate of return on investments from 7.25 percent to 7 percent over five years. The City, as planned, will contribute an extra $2 million above the amount paid in the current fiscal year to support the pension investment fund.

Inflation-fueled rising costs and flat sales tax revenue are driving a 6.5 percent increase in the proposed General Fund operating budget, while $6 million is being withdrawn from the City’s $30.6 million Unassigned Fund Balance, which are easily accessible reserve funds.

Despite the lean budget, there’s much good news:

• The City’s General Fund Balance reserves currently total approximately $114.6 million. Knoxville’s bond ratings are at an all-time high, and the City’s debt per capita is the lowest of Tennessee’s six largest cities.

• Public safety remains Job #1 – and competitive pay for first responders is a top priority. Kincannon’s proposed budget directs $102.1 million to salaries and benefits for police officers and firefighters. It’s the single largest item in the proposal.

• Historic support for affordable housing remains another high priority. Kincannon is proposing to invest more than $8 million – including $4.5 million to support the $200 million Transforming Western partnership project, $2.5 million to the Affordable Rental Development Fund, and $900,000 in City and philanthropic funds to foster affordable home ownership. That includes nearly $500,000 to help Habitat for Humanity build a new Knoxville community.

• Keeping her promise to continue the transformation of Chilhowee Park, Kincannon is proposing to add four new employees as a Public Service Department crew assigned full-time to the historic park. This is in keeping with Chilhowee Park transitioning away from an event venue and being managed through Parks and Recreation. Kincannon is also budgeting $2 million for as-yet-unspecified Chilhowee Park capital improvements – an advisory group has been formed to recommend park priorities.

• More than $2 million is allocated in Kincannon’s proposed budget to prevent homelessness and aid those experiencing housing instability. The City’s support for warming centers would increase by $200,000 to a total of $500,000 – and, with a Knox County match, that support totals $1 million.

Here is a breakdown of other budget priorities:

Public Safety

• $9.5 million – roads, bridges and other transportation safety upgrades and repairs

• $1.6 million – Vision Zero programs, such as sidewalk repairs, ADA curb cuts, traffic calming, intersection improvements, modernization of school zone flashers

• $2.7 million – renovation of Fire Station No. 15 in Fountain City, upgrades in Fire Department life-saving equipment, radios, and defibrillators

• More than $2 million – toward violence interruption and prevention, as well as support for community groups that empower youth

• Five new Police Department positions, which reflects the first increase in KPD’s authorized staffing level in decades


Healthy and Connected Neighborhoods

• $26.5 million – City’s combined six-year commitment to Transforming Western
-- This multi-year investment supports the more than $200 million KCDC-led initiative that’s creating almost 500 modern, permanently-affordable and market-rate homes while re-invigorating the residential, recreational and commercial components of one of Knoxville’s largest neighborhoods

• $7.1 million – improvements to parks and recreation facilities, greenways, pools, playgrounds and ballfields, in response to the recently-adopted Parks & Recreation Master Plan
-- Includes $1.5 million to construct the First Creek at Austin Greenway Connector
-- Funding to increase pay for Parks and Rec’s seasonal employees (pool lifeguards, summer camp and after-school program employees, bus drivers) from the current $9 to $10 an hour range to $13 to $15

$1.4 million – Zoo Knoxville capital projects, including support for the Rhino Exhibit, which is addition to supporting operational funding


A Clean, Resilient Future

• $2.35 million – energy-efficiency upgrades to roofs and heating/ventilation systems at City buildings; these investments that will pay for themselves over time by reducing utility bills, while also cutting greenhouse emissions

• $1 million – sustainability innovations and community charging stations


Thriving Businesses, Good Jobs

• $3.3 million – support for Knoxville’s key economic development partners (Knoxville Chamber, KCDC, Visit Knoxville, Knoxville Entrepreneur Center) --Continued funding will support business development in Knoxville’s Latino/Hispanic community in partnership with Centro Hispano, and funding for the Knoxville Entrepreneur Center supports the launch and expansion of small businesses

• $150,000 – support for KEC’s move to larger space to accommodate its expanding community


Good Governance

• $2 million – Community Agency Grants to support local arts and social service non-profits

• $900,000 – support for non-profits addressing issues ranging from food insecurity to housing instability to after-school and summer programs (such as Legal Aid, Second Harvest, Senior Citizens Home Assistance Service, Community Schools, Boys and Girls Clubs)

• $338,000 – support for health, mental health, and addiction service providers (River Valley Health, Kim Health, McNabb Center)

• $500,000 – matched by Knox County for a $1 million total – to support operations at the EmPATH facility in North Knoxville


Fiscally Responsible

• Thanks to a $25 million lump sum payment on Convention Center debt last year, the City is paying $4.1 million less in FY 2026-27 for bond debt payment; over time, the lump sum paydown will save taxpayers $30.2 million

• The City’s debt load is relatively small: 15.7 cents on the $2.1556 tax rate goes to debt service, while almost $2 goes to the General Fund to pay for services and operations

Mayor Kincannon’s proposed budget will be presented to City Council for first reading on April 28, 2026, with a legislative budget hearing and public hearing to follow on May 7. Council's second reading of the budget currently is scheduled for May 26. The new fiscal year begins on July 1.

Mayor Kincannon’s State of the City Address and supporting budget documents can be found here: www.KnoxvilleTN.gov/Budget.