2026 Budget Retreat Update
Knoxville's finances remain healthy, as some tax revenues are increasing. But so are operational costs, fueled in part by inflation.
Mayor Indya Kincannon, City Finance officials and City Council members kicked off a mid-fiscal year budget retreat at the Public Works Service Center on Friday, Feb. 13, 2026, by rolling up their sleeves and wading deep into budget metrics.
They reviewed budgetary trends and projected what's likely to happen as FY 2025-26 comes to a close this summer.
There were a lot of high notes:
• Knoxville's bond ratings — reflecting strong financial stewardship, low risk and strong stability — are at an all-time high.
• Sales tax and hotel-motel tax revenues are each projected to be up by about $1.2 million, compared to a year ago.
• Even with a budget amendment that withdrew $6 million last year, the City's unassigned fund balance — in essence, its most accessible savings account — is projected to end the fiscal year with $30.5 million.
There also were some concerns. For example, the price tag for deferred maintenance — mostly, updates needed to modernize an aging stormwater system — is up by $58.7 million. And inflation, even as it slows, is increasing the City's costs by more than $3 million this year.
There also were some interesting and maybe surprising facts that came out of the workshop.
Did you know that the City dedicates 72 percent ($179.1 million in FY 25) of its Local Option Sales Tax revenues to support Knox County Schools? Only 50 percent is required under Tennessee law. That extra 22 percent equates to $54.6 million above what's required.
Another factoid: Knoxville's total debt is $114 million. How does that compare? It's actually the lowest of the six largest Tennessee cities, measured as debt per capita and/or as a percentage of each city's General Fund revenues.
(Knoxville's debt per capita is also a small fraction of that compared with all cities of all sizes, or all cities with 50,000 or more residents.)
If you missed the budget retreat, you can watch a start-to-finish video of it, courtesy of Knoxville Community Media, at
www.KnoxCM.org. The KCM video should be available by Monday, Feb. 16, 2026.
• 2025-2026 Six Month Financial Report [PDF]
• Financial Update Presentation [PDF]
• City Overview Presentation [PDF]
• 2026-2027 Budget Information
• 2025-2026 Adopted Operating Budget [PDF]
• 2025-2026 Six Month Financial Report [PDF]
• 2025-2030 Capital Improvement Program [PDF]
• Budget Archive (budgets from years 2001-current)
January 20-22, 2026 - Capital Budget Hearings / Meetings with Departments
February 13, 2026 - City of Knoxville Budget Retreat and Six Month Financial Report released
March 5-6, 2026 - Mayor's Budget Hearings
April 24, 2026 - Mayor's State of the City Address and Proposed Annual Operating Budget released
April 28, 2026 - City Council First Reading of Proposed Budget & Tax Ordinances
May 2026 - Knoxville-Knox Planning Commission Hearing on CIP
May 2026 - Legislative Budget Hearings & Public Hearing
May 26, 2026 - City Council Second Reading of Proposed Budget & Tax Ordinances
June 15 2026 - Last Day to Approve Budget & Tax Ordinances
July 1, 2026 - New Fiscal Year Begins
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