Could Knox County Raise Taxes?

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Knoxville (WVLT) - Knox County could get seven million more state dollars for schools if Tennessee changes the formula that determines how counties get their shares.

But Volunteer TV's Gordon Boyd finds that some are questioning whether even that would be enough to avoid raising taxes, given what's new on the budget plate.

Specifically, how do you pay for that improved retirement plan for Sheriff's officers? The improvements you the Knox County voters approved last November.

A week away from the county mayor's budget address, it's still iffy.

"They need to have a top notch pension plan," says Knox County Commissioner R. Larry Smith.

From a Commissioner working the numbers, to deputies working the street, the message carries so clearly, Virginia Pesterfield's willing to raise her taxes.

As long as it helps our policemen and firemen," says Pesterfield.

"It will not cost taxpayers a red penny," says Stan McCroskey from the Fraternal Order of Police.

Most everyone agrees that a fully funded enhanced pension could cost $57 million, maybe six million new dollars a year.

The head of the Fraternal Order of Police insists new borrowing not only would pay for all of it, "The way the stock markets going, and returns remain good, the county's gonna make money over and above to pay off the bonds."

"I'm hopeful we can get through this year without a tax increase," says Commissioner Mike Hammond.

But, Commissioner Mike Hammond says he's not convinced bonds are a sure bet. Better, he says, to cut costs, and if you still come up short, "I would be more inclined to go with a vote on an increasing the sales tax, and let the voters vote on it."

A quarter cent hike, he says to nine and a half cents, could bring in another $14 to $17 million a year.

But give Virginia Pesterfield the choice, "People that are on a fixed income can't usually afford more sales tax. When property taxes go up, rent goes up too, but so many are on a subsidy they wouldn't know the difference."

Raising property taxes 3 percent would cost a Knox County homeowner another $20 a year, assuming it's a $100,000 house.

But Commissioner Larry Smith's wondering, "How much would it cost us if we bit the bullet and had a one time tax increase?"

The answer the number crunchers find: $120 bucks per Knox County taxpayer, but only your actuary knows for sure.

And they're not talking, not the sheriff's folks, nor the county mayor's office, at least not until the State of the Community Address a week from now.

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