EKBPA October Meeting Recap: Understanding Knoxville’s Local Option Sales Tax Referendum

The East Knoxville Business and Professional Association (EKBPA) hosted an informative October meeting focused on one of Knoxville’s most talked-about ballot items—the proposed Local Option Sales Tax increase. The discussion took place on stage at the Knoxville Auditorium, offering members a behind-the-scenes look at one of the city’s landmark venues.

Key Presentation: City of Knoxville’s Local Option Sales Tax Proposal

Kara, representing the City of Knoxville Mayor’s Office, led the discussion on the half-cent sales tax referendum that will appear on the upcoming ballot. She explained how the city’s current sales tax rate of 9.25% would increase to 9.75%, matching most surrounding counties.

What the Tax Increase Would Fund

The proposal is projected to generate approximately $47 million annually, or $235 million over five years, to fund neighborhood and infrastructure improvements throughout Knoxville. Planned investments include:

• Safer streets and sidewalks, especially in areas where children walk to school
• Stormwater and drainage upgrades near parks like Harriet Tubman and Edgewood
• Expanded affordable housing initiatives, increasing the city’s annual commitment from $8 million to $15 million
• Recreation and community center upgrades, such as improvements at the E.V. Davidson and Inskip Centers
• Greenway and park enhancements that have been long delayed

Kara emphasized that groceries, rent, gas, and prescription medications would not be affected, and that a significant portion of the new tax revenue would come from visitors and non-city residents, such as fans attending events at the Knoxville Civic Coliseum.

Questions and Concerns

Members raised thoughtful questions about how funds would be distributed and protected. City staff clarified that:

• Sales tax revenue cannot be used for salaries and must follow the city’s five-year investment plan approved by City Council.
• 50% of sales tax proceeds are legally directed to Knox County Schools, ensuring educational benefits citywide.
• “Affordable housing” definitions are set by HUD federal guidelines, not the city, and are based on countywide income averages.

The discussion highlighted community interest in how these funds could help District 6 neighborhoods—particularly those in East Knoxville—while also expressing concern about transparency, equity, and how “affordable housing” is defined.

Community Feedback

A few members suggested that the city provide clearer explanations of how much revenue will remain with the city after the county’s share, and that future meetings might benefit from hearing counter-perspectives to ensure a balanced discussion.

Closing Notes

The meeting concluded with updates from the Knoxville Civic Auditorium and Coliseum staff, who shared insights about recent improvements, facility upgrades, and upcoming events.

As always, EKBPA thanks all members and guests for their participation and commitment to community dialogue.

Here are a few public pictures…