The twist in this year’s city budget talks

We’ve been following this past month’s budget discussions between City Council and the mayor’s office. Since hours-long weekday meetings are hard for the average resident to attend and follow, we created a simplified overview of where officials stand on next year’s financial plan, and what it could mean for taxpayers. Council members are scheduled to vote on the budget for the first time in their meeting this afternoon, June 3.

(Spoiler alert: It’s still too soon to know if/how much city taxes will go up, but we can tell you how the conversation is leaning, and when you can expect to know more.) 

— William 

By William Newlin

In a reappraisal year like 2025, budget season has a twist — city officials won’t know the updated value of all the property in Chattanooga (and how much tax revenue it could generate) before the new fiscal year begins on July 1. Cash from property taxes is central to the city’s budget, making up close to 60% of revenue.

Meanwhile, Mayor Kelly is asking for a budget based on normal year-to-year revenue growth — it doesn’t tap into the huge property value increases due to reappraisals.

If Council members approve the proposal, officials would decide on a new tax rate once they have the reappraisal numbers and know how much tax revenue is available. That would come as part of a budget amendment later this year.

See our story “What your reappraisal means for your tax bill” here.

Pay raises for police officers and firefighters 

In a May 6 presentation, city Chief of Staff Kevin Roig told Council “there’s one glaring thing this budget doesn’t do” — provide pay raises to police officers and firefighters.

For a few budget cycles, civilian employees have received regularly scheduled pay bumps. Sworn positions in the fire department and CPD haven’t, Roig said, and stagnant pay has contributed to major recruitment challenges. 

The raises, which could total nearly $20 million, would be included in the Kelly administration’s planned budget amendment. Council members and the mayor’s staff have gone back and forth on how to find those funds, and it will likely require higher property taxes for many homeowners.

Learn more about CPD’s recruitment struggles with our story from last November.

What will fall to taxpayers?

Concerned about a heavier tax burden for residents who saw sky-high home value increases, multiple Council members have suggested the Kelly administration find budget areas to trim.

In a May 20 budget meeting, Roig said the budget amendment process gives the administration time to meet Council members somewhere in the middle. City staff would reexamine the budget to find cuts before proposing a new tax rate.

“ The easy button is just to put it all on the taxpayers,” Roig said. “ I will reiterate our commitment to rolling up our sleeves and doing the work to figure out how to get there in a way that minimizes ultimate impact and ask of taxpayers.”

Council members left their final budget meeting split on whether to push ahead with the mayor’s two-part budget and amendment proposal. Another option is to temporarily fund the government while city leaders work out a compromise budget in the coming months. 

“This one-two punch doesn’t feel as transparent as we’d like it to feel,” said Councilwoman Jenny Hill, District 2 at the May 20 meeting. “ The public at large is hearing we have a flat budget and we need to look at fire and police. But finding $20 million is no small thing.”

What’s next?

• City Council is expected to vote on the budget for the first time on June 3.
• The state comptroller recommends cities and towns approve a budget or opt for a temporary funding plan by June 30. 
• After the last reappraisal in 2021, City Council approved a final tax rate on Sept. 28.
• The city begins issuing property tax bills on Oct. 1. They’re due before March 1.

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Contact William at william@chattamatters.com