Why Johnson City’s 2020 budget is tighter than usual

Local

The full Johnson City Commission met for the first time Thursday to discuss the 2020 budget. 

City Manager Pete Peterson said local sales tax revenue growth was below average, leaving them with less money to spend on downtown development. 

“If there were significant additional revenues available we would do more to address quality of life issues and to take further steps to attract people to relocate to Johnson City,” he said. 

Peterson said sales and property taxes are top sources of revenue for the city. 

Sales tax is important to us in the city of Johnson City because it goes to our schools, it goes to our roads, it goes to our infrastructure,” said Andy Dietrich, past board chair of the Johnson City Chamber of Commerce. 

Total general fund revenue for 2020 is just short of $92 million. That reflects less than one percent growth from the last budget year. 

Peterson said they generally expect up to 3 percent growth from year-to-year. 

“We’re always concerned when a major source of revenue does not meet our very conservative and usually highly successful projections,” said Johnson City Chamber of Commerce President and CEO Gary Mabrey. 

These leaders attribute below average growth to a few factors. 

Washington County, Tennessee has seen a modest increase in population in the last few years but surrounding counties that supply shoppers are seeing a decline. 

“If you’re going to keep a vibrant, growing local economy you have to be cognizant of how to grow your population,” said Peterson. 

Dietrich speculated that the decline in sales tax revenue may have to do with an increase in online retail. He said this should be a reminder of the importance of shopping local. 

Overall, business and city leaders described the below average growth as a road bump, adding that they’re optimistic about the future.

That’s because there will soon be more options for shoppers in the area. 

A law passed by the General Assembly this past session paves the way for a Pinnacle-style development in the Boones Creek area of Johnson City.

MORE: Pinnacle-style development could be coming to Johnson City

Peterson said the city will next identify the development zone then reach out to interested developers about a business plan that will need to be submitted to the state for approval. 
 
Other highlights from the Johnson City 2020 budget in its current form include: 
  • A plan to drawdown their Fund Balance $910,737 to balance the budget
  • A four percent raise for all city employees for recruitment and retention
  • No increase in city employee health insurance 
  • No increase in Tennessee Consolidated Retirement System rate
  • No additional funding for schools or quasi-governmental agencies 
  • Acquisition of new fire and police vehicles 
  • Acquisition of new financial software and data security improvements 
  • Additional funding for street resurfacing to offset inflation for cost of materials 
  • Continued funding for construction design of West Walnut Street

Johnson City Commissioners are expected to reconvene June 13th and June 20th to finalize the 2020 budget. 

 
 
 
 

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