City Council approved Tuesday night a $163.5 million operating budget for the 2007-08 fiscal year. It includes an increase in the police department budget, fire department budget, and in the amount provided for health care incentives. They also agreed on the property tax rate for the city of Knoxville.

According to the city's executive summary, almost half of the budget will cover police and fire department expenses. To pay for the changes, the street paving budget is reduced by $200,000 from the amount originally proposed by Mayor Bill Haslam.

The budget also provides money for public services and engineering, parks and recreation, KAT services, capitol projects, and general government services.

"Budgets are important because we have police and fire and kids. We have tons of things we need for the budget to grow. We want to budget well and bring in business," said Randy Kenner, communications coordinator for the city of Knoxville.

The city plans to bring in new business by revitalizing the downtown area and creating more and better jobs for Knoxville residents.

"By the end of the year, we may see less than we thought we would because of softening of sales tax," said Kenner.

Kenner said the state sales tax has not been solved. He believes the city will be ok until June 30, but after than he is unsure of the sales tax rate.

The final balance of the budget also depends on the energy tax projection, health insurance costs and the rise in minimum wage.

Last year, the city had an operating budget of $159.8 million. The city made more money than they projected in their budget due to property tax.
 
Almost three-fourths of the operating budget comes from property taxes and local sales taxes. The Knoxville government also receives money from KUB, intergovernmental revenue, and other taxes and revenue.

"We had higher strength in property tax. The city has gotten more valuable," said Kenner.

We had higher strenght in property tax. The city has gotten more valuable.Randy Kenner

The property tax rate for the fiscal year of 2007-08 is $2.81 per hundred dollars of assessed value.

For example, a home appraised at $60,000 would be assessed at 25 percent of that value, or $15,000. The taxes are per $100 of value, so the city property tax due for a $60,000 home is $421.50.

To calculate the figure, divide $15,000 by 100 and then multiplying by the city tax rate of $2.81.

The property tax rate has remained the same since fiscal year 2004-05 when it increased by 35 cents.

According to the Executive Summary, budgeted personnel for the fiscal year 2007-08 year total 1.605 full-time positions and 36 part-time positions. This represents a gain of two full-time positions in the Police Department staff that would help the mayor achieve his goals for the city of Knoxville.


Knoxville Mayor Bill Haslam created the budget by following the goals of his administration in his plan, "Knoxville Works."

The mayor's goals include stronger, safer neighborhoods; city services you can cont on at a competitive price; an energized downtown; more and better jobs.