Kingsport Spirit

Finance. Ugh. It’s a topic that’s both critically important and endlessly dull for many. But let’s break it down in a way that actually matters: Just like managing a personal budget, is your government living within its means? Is it making politically popular promises it can’t sustain? Is it simply kicking the can down the road?

I recently saw a piece called “Why 27 U.S. States Are Going Broke”. It’s worth a watch.

Tennessee is the most populous state (by far) listed of the most financially stable states by Truth In Accounting, a government watchdog.

Tennessee is a shining example of fiscal responsibility. The state is well-managed and fiscally sound—and it shows.

Tennessee has also become one of the top destinations for relocation.

Coincidence? Hardly.

Every year, I attend the Ideal Living real estate show with Tennessee Tourism, often in Long Island, New York. Think of it as speed dating for people hunting for a new state to call home. Booths from Florida, the Carolinas, Mississippi, Arkansas, and others line the venue, each vying for attention.

When people stop at Tennessee’s booth, I ask, “Are you interested in Tennessee?” More often than not, they reply, “I haven’t been, but my investment broker says I should be.” That tells you something. Our lines have grown longer while others haven’t. People are paying attention.

“Higher taxes tend to make people move, especially top earners. That’s according to studies on states like California. When the marginal tax rate increases by 3%, California loses about 0.8% in the tax base in the top income bracket. That’s actually substantial, because it’s like 1% of the tax base in the very high bracket, which for the most part accounts for the majority of tax revenues overall.” (Source: “Why 27 U.S. States Are Going Broke”)

A Taxpayer’s Paradise

First and foremost: Tennessee has no income tax. Period. East of the Mississippi, only Florida and New Hampshire can claim the same. But Florida is grappling with an insurance crisis fueled by climate risks, and New Hampshire’s winters? Let’s just say they’re not for everyone. That leaves Tennessee—a state that’s centrally located, making it easy to stay connected with loved ones back home.

But the tax advantages don’t stop there:

• No annual taxes on vehicles or personal property.
• No estate tax or inheritance tax. Tennessee believes it’s your money and that it should stay in your family—not go to the state.

What’s the Catch?

Naturally, they ask: “What’s the catch? I bet property taxes are high.”

Not at all. Tennessee’s property taxes are based on just 25% of appraised value. Plus, the state requires local governments to adjust their tax rates after reappraisals so they don’t rake in windfall profits. Think of it as a Walmart rollback on property taxes.

“Okay, but I bet schools are subpar.”

It varies by area, but Kingsport’s scores merit national attention.

“Fine, but that sales tax must hurt.”

Not when you crunch the numbers. Even with a higher sales tax, you come out far ahead.

Many people are waking up to the reality: more taxes don’t necessarily mean better services. In fact, for years, they’ve been sold the idea that bloated state bureaucracies and overly generous public pension plans are normal. Spoiler alert: they’re not sustainable.

Zooming Out

Take a step back and compare Tennessee to a neighboring state like Kentucky. Similar geography. Similar climate. But drastically different fiscal health. Why? Tennessee has been well-managed for decades—regardless of which political party was in charge. Kentucky has significant unfunded liabilities in the state’s pension plans. These growing obligations have substantially impaired the state’s ability to meet its financial commitments.

It’s not magic; it’s good governance. And people are noticing.

And every decision made by the state government either improves or worsens the situation. Thankfully, Tennessee requires a fiscal note on every new piece of legislation. Our legislators have a long history of paying close attention. Let’s hope that continues.