The worst kept secret in Chattanooga government was revealed in a round-about way Tuesday — the city set the table for a property tax hike to pay for raises for first responders and whatever else it may need.
Oh, the words in a presentation to City Council members weren’t so blunt as “tax increase.” Accepting the recently adjusted property tax rate, said the city’s director of housing finance, Hanneke van Deursen, would put the city behind on addressing needs. “We need new revenue,” she said. To be the “best mid-sized city in America, we need to fund” the things we need, van Deursen said. The city needs to capture “growth created by the past investments,” she said.
The slides accompanying the presentation spelled out the dilemma for City Council members. Leaving the certified tax rate at 1.55%, where it landed after the recent property reappraisal process, would raise the same amount of money from taxpayers as in 2024, $162 million (plus $5 million from new development). Moving the rate back to where it was in 2024, 2.25%, would give the city $242 million, which is an additional $75 million in revenue.
Raises for first responders would cost about $17.5 million annually, which factors in $5 million the city approved for raises earlier this year.
In May when Chattanooga Mayor Tim Kelly presented his 2026 budget, he acknowledged it was a flat budget that “puts us on a solid footing.” He said the city has “a strong foundation for progress” and that the budget “meets today’s challenges and helps to shape a future that delivers on the promise and potential of our city.”