Taxes

August 4th, 2010

Against Building Taxpayer Funded Denominational Medical School in East TN

King College, a denominational college located in Bristol, Tennessee, has been in discussions with Kingsport, Bristol, and Sullivan County officials to build a medical school in Kingsport and Bristol.

The cost for the medical school would be about $150 million. King is looking for $50 million to come from the cities of Kingsport ($40 million) and Bristol ($10 million), $50 million from the State of Tennessee, and the remaining $50 million from private donations.

At the July 7, 2009, Kingsport, Tennessee Board of Mayor and Alderman, a resolution was passed on first reading to endorse the King College Medical School Initiative, and pledged its commitment to work with Bristol, Sullivan County, and King College to advance the project.

While it does sound like a good project for the area, there will be a major impact on the taxpayers if this is funded via a property tax increase. Mayor Dennis Phillips has stated that if Kingsport were to fund $40 million for the project, property taxes would have to be raised 25 cents.

Below are tax rates that have been extracted from the Tennessee Property Tax Rates that show the top 20 cities that have the highest tax rates in Tennessee from 406 different tax rates for the different cities and counties.

I have added 25 cents to the tax rates for the two Kingsport line items (Kingsport-Sullivan and Kingsport-Hawkins) in the table below. Kingsport, with the 25 cents added, would have a rank of 10 and 12 as having the most expensive tax rates in the state. Bristol has a rank of 14 and I have no knowledge if they would increase property taxes.

Top 20 Cities with the most expensive property tax rates

R a n k	County	City	Total County and City Tax	Property Tax for $150k Home	Household Median Income	% Taxes from Household Income	Median Home Value
1	SHELBY	MEMPHIS	$7.29	$2,734	$32,285	8.47%	$130,695
2	SHELBY	GERMANTOWN	$5.63	$2,111	$113,733	1.86%	$278,800
3	SHELBY	BARTLETT	$5.63	$2,111	$74,091	2.85%	$164,600
4	KNOX	KNOXVILLE	$5.50	$2,063	$32,538	6.34%	$102,300
5	ANDERSON	OAK RIDGE	$5.45	$2,044	$45,474	4.49%	$120,100
6	SHELBY	COLLIERVILLE	$5.37	$2,014	$99,239	2.03%	$255,400
7	HAMILTON	CHATTANOOGA	$5.36	$2,009	$35,913	5.59%	$121,100
8	SHELBY	MILLINGTON	$5.32	$1,995	$43,753	4.56%	$124,144
9	MADISON	HUMBOLDT	$5.30	$1,988	$50,007	3.98%	$181,800
10	HAWKINS	KINGSPORT	$5.11*	$1,916	$34,391	5.57%	$99,900
11	SHELBY	ARLINGTON	$5.09	$1,909	$59,131	3.23%	$233,597
12	SULLIVAN	KINGSPORT	$5.08*	$1,905	$34,391	5.54%	$99,900
13	ROANE	OAK RIDGE	$5.04	$1,890	$45,474	4.16%	$120,100
14	SULLIVAN	BRISTOL	$5.03	$1,886	$36,454	5.17%	$94,000
15	MORGAN	OAKDALE	$4.98	$1,868	$32,174	5.81%	$47,502
16	COFFEE	MANCHESTER	$4.96	$1,860	$36,674	5.07%	$112,275
17	HAMILTON	LOOKOUT MOUNTAIN	$4.95	$1,858	$117,767	1.58%	$515,354
18	HAMILTON	RIDGESIDE	$4.95	$1,858	$103,995	1.79%	$293,387
19	LAUDERDALE	HENNING	$4.95	$1,856	$23,407	7.93%	$65,212
20	HAMILTON	SIGNAL MOUNTAIN	$4.93	$1,848	$78,175	2.36%	$283,948

* The current city and county combined tax rate for Kingsport-Sullivan County is $4.86 and Kingsport-Hawkins County is $4.86. Twenty-five cents has been added to each of the Kingsport tax rates in the above table.

The table below again shows the top 20 cites and the effect on the taxpayers’ Household Median Income. There appears to be a disconnect with those cities having a high tax rate, lower Household Median Income and the percentage of Household Income needed to pay property taxes.

The household median income for Kingsport is $34,391 and the Kingsport majority of Kingsport property owners would pay over 5.5 percent of household income ($150k home) for property taxes if the 25 cents is added to the Kingsport tax rate. The Kingsport rank is 6 and 7 and Bristol comes in at a rank of 8 in the table below for the largest percent of household income needed to pay property taxes.

A taxpayer funded medical school would reduce the already low Kingsport household income and would reduce the standard of living for the majority of Kingsport citizens so the city could reap the benefits of increased revenue to spend on other pet projects.

Top 20 Cities that take the highest percentage of income for property taxes

R a n k	County	City	Total County and City Tax	Property Tax for $150k Home	Household Median Income	% Taxes from Household Income	Median Home Value
1	SHELBY	MEMPHIS	$7.29	$2,734	$32,285	8.47%	$130,695
2	LAUDERDALE	HENNING	$4.95	$1,856	$23,407	7.93%	$65,212
3	KNOX	KNOXVILLE	$5.50	$2,063	$32,538	6.34%	$102,300
4	MORGAN	OAKDALE	$4.98	$1,868	$32,174	5.81%	$47,502
5	HAMILTON	CHATTANOOGA	$5.36	$2,009	$35,913	5.59%	$121,100
6	HAWKINS	KINGSPORT	$5.11*	$1,916	$34,391	5.57%	$99,900
7	SULLIVAN	KINGSPORT	$5.08*	$1,905	$34,391	5.54%	$99,900
8	SULLIVAN	BRISTOL	$5.03	$1,886	$36,454	5.17%	$94,000
9	COFFEE	MANCHESTER	$4.96	$1,860	$36,674	5.07%	$112,275
10	SHELBY	MILLINGTON	$5.32	$1,995	$43,753	4.56%	$124,144
11	ANDERSON	OAK RIDGE	$5.45	$2,044	$45,474	4.49%	$120,100
12	ROANE	OAK RIDGE	$5.04	$1,890	$45,474	4.16%	$120,100
13	MADISON	HUMBOLDT	$5.30	$1,988	$50,007	3.98%	$181,800
14	SHELBY	ARLINGTON	$5.09	$1,909	$59,131	3.23%	$233,597
15	SHELBY	BARTLETT	$5.63	$2,111	$74,091	2.85%	$164,600
16	HAMILTON	SIGNAL MOUNTAIN	$4.93	$1,848	$78,175	2.36%	$283,948
17	SHELBY	COLLIERVILLE	$5.37	$2,014	$99,239	2.03%	$255,400
18	SHELBY	GERMANTOWN	$5.63	$2,111	$113,733	1.86%	$278,800
19	HAMILTON	RIDGESIDE	$4.95	$1,858	$103,995	1.79%	$293,387
20	HAMILTON	LOOKOUT MOUNTAIN	$4.95	$1,858	$117,767	1.58%	$515,354

I have heard some members of the Kingsport BMA express their desire to have a college located in Kingsport. They should keep in mind that there are very large number of cities that have been successful without having a college and who also have a better standard of living than Kingsport.

College Cities	Household Median Income
Knoxville	$32,538
Bristol	$36,454
Chattanooga	$35,913
Johnson City	$35,746
Memphis	$35,181

The above cities that have a college appear not to have increased the standard of living and have a low household median income.

Below is the household income distribution for Kingsport and the household median income for Kingsport is $34,391. In the graph below there are 2,636 people who earn less than $10,000 classifying them as living in poverty. I challenge the elected officials to venture outside of their social and political groups and try to understand the plight of the majority of wage earners in the Kingsport area. The medical school would bring jobs, but some of these jobs will be imported jobs and the common folks would not have the background or training for these jobs. Ask what you can do to raise the standard of living (higher income) for Kingsport citizens without imposing a property tax burden.

I feel that the taxpayers should not be taking the risk of funding a medical school when there already is a state funded one in Johnson City. The need for doctors in this area is questionable since the population is declining in Sullivan County. If they area has trouble attracting doctors or keeping doctors, then take a hard look at the reason.

Quality of Life issues are important, but a good Standard of Living for local folks just might make the area prosper by increased spending by the majority of citizens. The bottom line is that the area needs good paying jobs without the additional burden on the taxpayers.

I need to point out that no funding has been voted on so far, but projects such as this grows legs very fast and then its then to late to react. The intent of this post is to make you aware of the issues so you can make your views know. Update: Many elected officials have expressed their support of this project including Lt. Governor Ron Ramsey who may make it a part of his campaign for governor. Again, I must point out that I am not against the project but am very concerned about it being funded by taxpayers.

Please contact your elected officials and tell them NO to a taxpayer funded denominational medical school. Click on the email links below and add your comments in your own email program.