Rocky Top OKs tax increase to pay for health-care benefits
Rocky Top residents can attend all City Council meetings in this building on North Main Street. (photo:G. Chambers Williams III )
The measure passed on a 4-0 vote, with one council member absent.
Present and voting yes were Mayor Kerry Templin and councilmen Joe Tackett, Jeff Gilliam and Keith Daniels.
Under the change, the new tax rate is expected to generate about $65,000 in additional revenue, according to City Manager Mike Ellis.
He said the increase was required because of an increase in premiums for health-care coverage for city employees.
The change came through passage on second and final reading of Ordinance 613, which was approved by the council on first reading Thursday, July 17.
The council held a public hearing on the proposed new tax rate just prior to Monday’s meeting, but no one showed up to comment on the issue.
“I was surprised there was nobody at the hearing,” Mayor Templin told The Courier News after the meeting.
During the same meeting, the council also passed on second and final reading Ordinance 614, which amends the city’s zoning ordinance to prohibit storage facilities in C-4 downtown Central Business District.
Ellis said that change was needed because the city wants to reserve the downtown business district for consumer businesses that bring customers into the area to shop. Converting buildings into storage-rental places does not fit into the city’s vision for the downtown area, he said.
As for the property taxes, the tax rate is rising about 12.6 cents per $100 assessed property value over the previous year’s actual rate, Ellis said.
The new rate will be nearly $1.28. While that is well below the city’s fiscal year 2025 tax rate of $2 per $100 evaluation, the new rate takes into account the increased property-value assessments brought on by a countywide reappraisal earlier this year.
Total property-tax collections for the new fiscal year, which began July 1, will total about $1.625 million, up from the estimated $1.57 million collected during the 2025 fiscal year, which ended June 30.
The 2025 budget, which was passed May 27 on second and final reading, includes 3% raises across the board for the 27 city employees.
Initially, it did not include the tax rate for the new budget year, which was not able to be set until the city got its certified rate from the state Board of Equalization earlier this month.
The certified rate provided by the state was designed to take into account the average increase in property values, so as to make the reappraisal close to “revenue neutral” for local governments as required by state law.
To go beyond that rate, as Rocky Top chose to do, the city was required to go through the process of raising property taxes by way of an ordinance and a public hearing.
In the new budget, the city plans $3.025 million in general fund expenditures for the year, against expected revenue collections of $2.839 million. The spending plan includes capital expenditures that would be offset by grant money.
Other 2026 revenues are projected to be $820,409 from the state, $20,676 from the federal government, and $353,000 from “other sources,” according to the proposed budget.
These amounts do not include utilities, which are covered by a separate budget.
Among the planned expenditures is $994,878 in salaries for the city’s employees.
