JOHNSON CITY, Tenn. (WJHL) — Leaders in Johnson City say their revenues are struggling to keep pace with costs driven up by inflation, so they are considering a property tax rate hike as part of this year’s budget.

City Manager Cathy Ball asked city commissioners to consider a 25-cent rate hike at a commission work session Thursday.

That means a Johnson City resident whose home is worth $200,000 would go from paying $865 per year in property taxes to $990 per year.

“We’ve really gone back in terms of not being able to build, resurface roads, do the things we need to do to keep up with the community needs in terms of infrastructure,” Ball told News Channel 11.

If approved as proposed, the new tax rate could generate about $5.4 million in additional revenue.

Most of the new revenue, 15 cents of each quarter, would fund the construction of a new Towne Acres school, with increased capacity to accommodate the city’s growing student population.

“That would save us from building an additional elementary school,” said Commissioner Jenny Brock. “There’s some real economies of scale there.”

The school system has said that the new campus would have a capacity for 700 students. The current facilities were built to hold 420.

The remaining 10 cents, Ball says, would fund infrastructure and essential services like the Washington County-based emergency management and 911 agencies.

“We want to partner with them and then demonstrate their need to be able to pay their employees more and deal with their increase in costs as a result of inflation,” Ball said. “We’re coming forward, essentially and saying we need to identify that as a need for the city.”

Any tax increases would have to be formally presented to the City Commission and approved.

Brock told News Channel 11 that the commission will begin hearing budget items during its May meetings.

She said the commission will approve the budget in June.