City officials unveiled a proposed $76.3 million budget for fiscal year 2026 during a work session Monday at City Hall, featuring a drop in the property tax rate to its lowest since 2008 amid ongoing challenges with public safety pensions and infrastructure needs.
The session outlined a timeline for finalizing the budget, with reviews in October, public input in November, and approval in December.
City Manager Eric Hanson tells WGIL, “I was pleased with how Monday’s presentation turned out. Our goal was to help Council members to better understand the mechanics of how we run the city.”
The plan follows council financial policies, focusing on core services while addressing rising costs. The full draft budget is displayed at the end of this story.
Key changes: Lower taxes, Grocery Tax ends
The city relies heavily on taxes, which make up 52% of all revenues, split into state-collected, locally collected, and property taxes, according to the presentation’s tax revenue breakdown.
The property tax rate is set to decrease—the lowest since 2008—potentially saving homeowners money, though rising property values might offset some benefits. Of the property taxes, School District 205 receives nearly 50%, the largest share, to fund local schools, followed by Knox County at 13.34% and the City at 10.99%.
The budget calendar, shared during the session, details the process from departmental forecasts in May-June to final approval in December.
Hanson noted that nearly three out of every four dollars spent from the general fund go toward police and fire protection, along with public works, infrastructure, and roads—accounting for 39% on police, 27% on fire, and 11% on public works.
Public Safety pensions: A top priority
Investments and challenges ahead
The budget includes new investments in infrastructure, such as road repairs and park upgrades, plus grant-funded projects like a community center. Personnel costs, including salaries and health insurance, are also increasing.
“While we don’t have the funds to do everything we would like, we’ll continue to invest in good quality services that will move the community forward,” Hanson told WGIL.
City leaders, as noted in the “Big Picture” topic, highlighted challenges like aging infrastructure and uncertain tax revenue as major concerns moving forward.
The council will refine the draft in the coming months, with details available on the city’s website once posted.
