On Aug. 28, at a gathering at West Hills/John Bynon Park to announce the formation of a group advocating for passage of the city’s proposed sales-tax increase, Knox County Republican Party Chair Martin Daniel hung back at the fringes of the small crowd.

The Knox County GOP has joined the city sales-tax referendum campaign.

He had ambled over to the park’s gazebo from his home in West Hills to take stock of the newly formed Neighbors for Knoxville. Mayor Indya Kincannon, who endorsed the group, was one of a handful of speakers that also included entrepreneur Brandon Bruce and greenways advocate Will Skelton.

When the meeting broke up, Daniel told a reporter that the county GOP stood against the proposal.

“There’s been little discussion about efficiency, cost cutting, doing more with less,” he said at the time. “The City always seems to be in tax-grab, revenue-grab mode.”

The Knox County Republican Party has now formally joined the fight over the proposed sales-tax increase by creating its own committee to campaign against the referendum’s passage.

Called Keep Knoxville Affordable, the GOP initiative has launched a website and on Monday sent a text message to voters.

“BEWARE Knoxville! Your city is trying to put another tax increase on you,” the text message read, along with a link to the committee’s website and a note that the Knox County GOP paid for the message.

During the November general election, city voters will choose whether to approve a .5-percent local-option sales-tax increase. Kincannon has pledged that the $47 million raised from the increase each year would go toward affordable housing, parks, greenways, sidewalks, paving and other infrastructure projects.

Kincannon and Neighbors for Knoxville leaders have said the city’s five-year plan for investing the revenues would strengthen city neighborhoods and improve residents’ quality of life.

Kincannon has said that Knoxville is on sound financial footing — current revenues are sufficient to make a $25 million lump-sum payment on the Convention Center’s debt — but the projects to be funded through the tax increase would enable the city to keep pace with growth. Knoxville’s population has increased 5.85 percent since 2020 to more than 202,000 residents. If the city continues at that pace, the population will grow by another 12,000 or so in the next five years to about 215,000.

“We have an extraordinary opportunity to tackle more needs in our city and complete projects that would normally take 20 years in about five years,” Kincannon said when announcing the proposal in May.

City officials estimate about half the sales tax collections come from out-of-towners, including tourists, business travelers and local shoppers from outside the city.

The GOP’s Keep Knoxville Affordable is the second anti-tax group to form in opposition to the increase. Developer and former City Council candidate R. Bentley Marlow has established Knoxville Against Raising Taxes.

Both the opposition groups say the city has a history of wasting money. They point to the abstract sculpture – commissioned during Mayor Madeline Rogero’s administration – installed earlier this year at Cradle of Country Music Park downtown at a cost of $1.2 million as one example. Another common target is the $11 million in improvements to Augusta Quarry in Fort Dickerson Park in South Knoxville.

The Kincannon administration’s five-year spending plan would spread the funding throughout the city, divided into projects specific to each City Council district ($30.5 million annually for parks, greenways, sidewalks and public facilities) and citywide projects ($16.5 million a year for housing, traffic calming and safety, and road paving). The five-year total would come to an estimated $235 million.

Though Keep Knoxville Affordable focuses on taxes, noting that the city has raised the rates for property and hotel-motel taxes in recent years, the Republican organization and Marlow’s Knoxville Against Raising Taxes also point to the regressive nature of sales taxes as troublesome.

Sales taxes typically hit lower-income households harder. “A sales tax increase would hit low- and middle-income residents the hardest — the very people who spend most of their income on essentials,” Knoxville Against Raising Taxes states on its website.

The Kincannon administration estimates that the tax increase wouldn’t affect most essential purchases. Food and food ingredients for home consumption would be exempt, and sales taxes aren’t levied on rent, gas, utilities and prescriptions. The city estimates that a household with an income of $15,000 to $29,000 a year would pay an additional $5 a month.

There are some inconsistencies in the arguments. Keep Knoxville Affordable’s website states, “As the city of Knoxville looks to raise more revenue, critical needs like road repair, homeless issues, and essential infrastructure continue to be overlooked,” even though those projects are precisely how the Kincannon administration has proposed spending the money.

Still, both opposition groups correctly note that the administration’s spending plan wouldn’t be set in stone. Budgets are approved one year at a time, and future mayors and City Council wouldn’t be bound by the current administration’s promises. 

One way for the spending plan to founder would be if Knox County opts to follow the city’s lead in future years. A countywide increase would redirect half the revenue generated in the city to Knox County Schools.

Turnout — typically anemic in city elections — will likely be a key factor. The advocacy groups will make their cases to the public, but only the people who actually go to the polls will decide the outcome.