Tax cap backers gain momentum

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Erik Wiatr (left) and Andy Fox discuss the origins of the tax referendum on the balcony of Fox’s downtown office on Tuesday. Photo: J.J. Stambaugh.

As a general rule, we don’t plan on covering politics — at least, not in the traditional ways.

At Hard Knox Wire, we see ourselves as being focused instead on the criminal justice system, public safety agencies, social services and the problems all those institutions try to address. We also like to throw in some history, some humor, and some random “We like this, maybe you will, too” pieces for some balance. What we don’t see ourselves doing is blow-by-blow coverage of most local races, endless “candidate profiles,” legislative summaries and “Who’s in/Who’s out” political gossip.

Bluntly put, Compass and the News Sentinel cover that kind of thing better than we ever could. We can’t ignore politics entirely (more’s the pity) but when we do cover those stories, it will usually be when they touch upon one of our core interests, such as political contests for the posts of Sheriff or District Attorney.

Every now and then, however, some story will come along that catches our attention for some other reason. Maybe it’s weird, or funny, or so unusually dramatic that we feel compelled to write about it. Perhaps it raises some questions that we, in our incurable geekdom, find inherently interesting. Heck, maybe we just think it’s not getting the attention it deserves.

When we heard that a newly minted conservative group was trying to pass a referendum that would make it nearly impossible for elected officials to raise the property tax rate, we figured it was worth looking into….

Officials with the group, the Knox Liberty Organization, told us yesterday they’ve already raised approximately 2,600 signatures of the 7,427-plus they need to put the measure on the ballot for the November 2 general election (they’d like to raise nearly 15,000 signatures, however, to feel confident they can successfully fight off any legal challenges).

As of Tuesday, they said,  27,431 households had copies of the petition on the way to their mailboxes. Until recently, the signatures gathered by the Knox Liberty Organization have been collected by going from door-to-door as well as through events, meetings and the group’s website at knoxvilletaxcap.com.

If the Knox County Election Commission certifies that at least 7,427 registered voters have signed the petition, the ordinance must be adopted by either Knoxville City Council or placed on the ballot, according to Erik Wiatr, a realtor and activist who chairs the Knox Liberty Organization. 

If it’s adopted by either City Council or by the voters, it can only be changed by voter approval in the future if officials want to raise the property tax rate above today’s level of $2.46 per $100 of assessed value. 

Wiatr said the main impetus for the initiative was last year’s 34% property tax hike in Nashville.

“Seeing that as a possibility in our city was a huge concern,” he said. “I started looking into the City charter and the referendum process, and eventually we got to this point.” 

Some fairly wealthy and powerful Knox businessmen have pumped over $6,600 thus far into the ballot initiative: Scott Davis, Scott Smith, Steve Maddox, Randy Burleson, Mike Chase and former state Rep. Martin Daniel (R). It’s a fairly eclectic group that includes developers, restauranteurs, and at least one attorney — Andy Fox, who’s become something of a gun-toting gadfly who deeply enjoys buzzing about the heads of liberal politicians like Mayor Indya Kincannon. 

Some of these guys have had sharp disagreements with Kincannon and her predecessor, Madeline Rogero, over the years and they clearly expect to have more in the future.

“I think we are moving in a direction where we will see a tax increase after this year’s election,” Wiatr said. 

When asked about the possibility of the City encountering a fiscal emergency or economic downturn that leads to a severe drop in revenue, attorney Fox (who describes himself as the initiative’s “legal engineer”) said there are other ways to get money than with a property tax increase. 

“We are not trying to starve the City of revenue,” Fox said. “As long as there’s good government and the property values go up, the City’s revenues are going to go up.”

Wiatr agreed, adding, “There can always be another referendum in the future and the City can justify it to the voters. I think this is the most responsible way, as it allows for the voters to be involved…. And I also hope it will prioritize economic growth as a way to expand the tax base without increasing the tax rate.”

Given the background of some of those who have bankrolled the initiative, it’s hard not to wonder if something is afoot besides a fear of tax hikes. Some of the more business-minded persons behind the Knox Liberty Organization didn’t like the City’s policies about, say, closing restaurants during the height of the pandemic. Gun rights are another perennial sore point, although there is precious little that a municipality can actually do to restrict Knoxville residents from owning, carrying, or dancing a waltz in Market Square with their favorite firearms. 

In fact, it seems as though the ballot measure is motivated in part by the traditional conservative antipathy toward taxes but is also a personal swipe a Kincannon, who recently pushed through what is arguably the most progressive budget in Knoxville’s history. Her administration (with the support of Council) has devoted millions of dollars to fighting poverty and the social ills that go along with it. 

Kincannon and her team put together a short but strong rebuttal to the conservative group’s initiative for this article, adding that they wished to combat “some of the misleading information being spread.”

Kincannon had this to say: “The City tax rate is nearly the lowest it’s been in over 30 years.  Capping the rate would threaten basic City services, especially fire, police, street maintenance, waste management, and more.  It’s our core public safety and public service programs that would be most at risk from the proposed referendum, which may not even be legal under the State constitution.”

Kincannon clearly feels comfortable letting her record speak for itself. While her opponents would like to paint her as the kind of “tax-and-spend” Democrat that’s become something of a foundational caricature for conservatives, Kincannon doesn’t exactly fit that mold — she hasn’t tried to raise taxes and she hasn’t been running up a deficit. 

 “As you are aware, this year’s City budget included no tax increase,” said her spokesperson, Kristin Farley. “The 2021-22 budget maintains the tax rate of $2.46 per $100 of assessed value — a flat rate for the 5th consecutive year. For comparison, the tax rate in 2000 was higher than $3.00.

“The City enjoys its best bond ratings in its 230-year history, reflective of the conservative fiscal management and careful stewardship of tax dollars on the part of Mayor Kincannon and City Council. The City also has a healthy savings account. As of June 30, 2021, the City’s estimated total General Fund balance is expected to be roughly $87 million.”

Farley said the City’s tax rate is 27 cents lower than it was five years ago, the debt obligation is 30 percent lower than it was 20 years ago, and it looks like the economy is banging along at a healthy pace. 

“Building permits are on the rise,” she said. “Projects valued at $697 million were issued permits in 2020, notably during a pandemic, when construction was expensive and supply chains impacted. The high level of construction happening in Knoxville clearly reflects major investment and economic growth.”

Put another way, Kincannon may spend a lot of dough, but she makes sure the money’s in the bank first and she’s responsible enough to not gut the savings account for daily expenses. That makes her more responsible than most of her constituents, although that’s probably cold comfort to those who don’t think we need to spend money on social programs or public art in the first place.  It may, of course, turn out to be the case that Wiatr is correct and Kincannon is quietly preparing for a tax increase next year, but so far she’s been quite happy, even proud, to govern without one. 

When given a chance to respond to Kincannon, Wiatr issued the following statement: “In the past, the property tax rate decreased due to the rise in property values and a state law that requires the rate to be decreased. The tax burden remains the same or higher on homeowners and businesses.”

Wiatr continued: “Mayor Kincannon’s admission that she thinks the tax rate needs to be increased above today’s current rate should be a concern for businesses and residents, especially low income and those on fixed incomes. Why the mayor would threaten cutting public safety instead of cutting $500,000 artwork, landscaping, and other non-essentials is another example of poor judgement that has resulted in police potentially being taken out of our schools, and high crime and record murder in our city.”

We’re honestly a little confused by part of Wiatr’s statement. We’re not sure precisely how Kincannon or her administration are to blame for the ongoing bloodbath in our streets. The fact is that Kincannon is facing a revolt from the far Left for refusing to even discuss slowing the flow of cash to law enforcement, largely because of the record homicide rate. It’s true that she’s in the process of also throwing a few million dollars at violence interruption, homelessness, and poverty, but that amount is dwarfed by the Knoxville Police Department’s record $60 million budget (and that doesn’t even count the millions going to build a new police headquarters). One can say many things about our mayor, but implying that she’s soft on crime is off the mark.

Anyhow, we’re getting pretty far afield of our original topic, which was effectively capping the City’s property tax through a referendum. Is it a good idea? Is it a popular idea? Is there a chance it will actually become law?

We think our readers can evaluate the worth of this proposal on their own. Regardless of its merits, it’s not at all unreasonable to think this proposal has a pretty good chance of getting on the ballot in November, and in today’s political climate there’s no telling how that vote would go. City voters traditionally veer to the Left, but with the GOP’s recently proven ability to “get the vote out” for their candidates we can’t help but wonder about the many “Trump” yard signs we still see every day and exactly how motivated their owners are going to be in November.

The group plans on turning in all the signatures by July 31.

Individuals interested in learning more about the petition drive or wanting to help collect more signatures can visit knoxvilletaxcap.com, email knoxlibertyorg@gmail.com, or call Erik Wiatr at 865-659-6656.  They plan on turning in all the signatures by July 31

J.J. Stambaugh can be reached at jjstambaugh@hardknoxwire.com 

Published on July 7, 2021