City faces tax hike to close fund gap

City faces tax hike to close fund gap

May 16th, 2010 by Cliff Hightower in News

Mayor Ron Littlefield will propose a property tax increase to pay for more police, to give pay raises and to restore funding to several city departments next year.

"It's a budget that puts us on sound footing," Mr. Littlefield said.

The mayor declined to specify the size of the proposed tax increase, but he said the additional money would go to beefing up the police department, hiring more employees and keeping recreation centers open longer, among other priorities.

Some council members said Friday they may not be able to swallow a property tax increase that restores that much funding to city departments. Councilman Jack Benson said the list of added funding needs is long for a municipality feeling the effects of a recession.

"It sounds to me like that's going to take a pretty huge increase," he said.

He said he prefers to see a budget that reflects a tax increase this year and maybe a small increase next year. When the council's budget sessions start Tuesday, he plans to look not only at what the city can do to increase its revenue, but what it can do to cut spending.

Mr. Littlefield's staff is expected to present a budget plan at 2 p.m. Tuesday. Over the next several weeks, the City Council will meet weekly to discuss budget issues.


Mayor Ron Littlefield said the following items would be included in his budget being presented Tuesday:

* Increase property tax

* Expand police department

* Restart employee pay plan

* Restore recreation center hours and programming in Parks and Recreation Department

* Add employees

* Increase in funding to outside agencies

* Increase in pension funding

* Restore employee longevity pay


* Chattanooga: $1.939 per $100 of assessed value

* Knoxville: $2.46 per $100 of assessed value

* Memphis: $3.1957 per $100 of assessed value

* Nashville: 57 cents per $100 of assessed value*

* Nashville is a metropolitan government; residents pay a higher Davidson County tax rate.

Source: Chattanooga


The last time the Chattanooga City Council raised property taxes was Sept. 11, 2001. The rate increased 48 cents to $1.939 per $100 of assessed value.

Last month, city department officials presented budgets to the council under three scenarios: One that increases spending by $25 million to $197 million; one that maintains spending at the current $172 million level; and one that cuts spending by 5 percent.

The mayor has said his budget does not fully restore funding to the level it needs to be, but it does include necessary spending increases. One of those is raises for city employees.

"Most people will get something," he said. "It won't be major."

The city has existed on a "shoestring budget" for years, he said. The last property tax increase was on Sept. 11, 2001. The rate is currently $1.939 per $100 of assessed value, according to city records.

Councilwoman Carol Berz, chairwoman of the Budget, Personnel and Finance Committee, said she likes the idea of implementing an employee pay plan and opening the parks and recreation centers. But the council needs to know how much these moves will cost and what they mean for the city.

"If we increase some of the costs to the people, we will have to see what the benefits are," she said.

Councilman Russell Gilbert also wants to see costs and benefits. He wants to read the fine print and see what else could be paid for by a proposed property tax increase, he said.

"What other things is this going to pay for?" he asked.

Council Chairman Manny Rico said he doesn't know if he and other council members could handle a property tax increase of 50 cents to 60 cents.

"I was hoping we'd do just enough to get by this year," he said.

Melanie Purcell, assistant director of the University of Tennessee's Municipal Technical Advisory Service, said she did not know of any other cities looking at property tax increases.

"Everybody has hit a wall, " she said. "Everybody is looking at everything."