Chattanooga got one vote closer to setting its spending in the next fiscal year as concerns about raises and a potential tax hike shaped some budget discussions.
The council took the first of two votes needed to approve a budget proposal from Mayor Tim Kelly’s administration Tuesday. Members made one major change to the plan Kelly’s staff presented to the council last month, adding a $5 million line item to put toward planned raises for police and firefighters.
That plan will cost about $20 million, and the Kelly administration expects to address the rest in a supplementary budget amendment later this year.
Offsetting some of the impact of those raises — by pulling from the city’s contingency fund appropriation and renewal and replacement spending — is a priority for council member Chip Henderson of Lookout Valley. He discussed the amendment to the mayor’s proposal ahead of the Tuesday vote, as a way of both supporting the raises and also keeping their effect on taxpayers minimal.
Chattanooga closing in on $345.2 million budget
“I think what this does is crack the door for an opportunity,” Henderson said. “I’m deeply concerned about Councilman (Cody) Harvey, families like you just starting to have kids, or Councilman (Jeff) Davis, that have kids, and how they’re making ends meet, and how many of them are just one emergency away from catastrophe, in a budget. And so I think it is upon us to make sure that we address this from the taxpayer’s standpoint, of making sure that we’ve found everything in this budget.”
The amendment gives the council a little more time to work out the details of the raises and how they will be funded.
Henderson and the council’s chair, Jenny Hill of North Chattanooga, both said they’d ultimately like to see the city go further — with a $10 million contribution to the raises. But $5 million is a place to start, Henderson said.
How to fund the remaining millions needed for the raises will need to be hashed out down the line, both Henderson and Kelly spokesperson Eric Holl said separately over text.
Hill said she had some additional concerns about using the contingency and renewal and replacement money.
“I don’t like the idea of raiding that fund to do this,” she said “which to me highlights the reality of each of us around this table, and you all in the administration, all have priorities that we’re really going to have to hash out when the time comes. I have absolutely been advocating for ‘We’re going to need to go 50-50 on this.’ And to build on what Councilman Henderson said, I mean, the reality is the taxpayers are paying for all of it, right?
“The question is, how much more are they going to have to pay? And we have questions that remain about what is the cost. How fast can we do this? Where do we have opportunities for other savings within departments or with reorgs or identifying if we’ve had scope growth?” Hill said.
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The conversation about tax increases comes at a time of widespread community concern over tax rates. In the spring homeowners throughout the county received property reappraisal notices that, in most cases, show major increases to the value of their houses. The tax rates can’t increase without public votes and revert automatically to a rate at which the government collects the same amount of money as it took in before the reappraisal. But many homeowners still will face higher payments if their properties’ values increased more than average across the county.
County leaders have said that they do not plan to ask to raise property taxes. City officials have not been as definitive.
Kelly’s chief of staff, Kevin Roig, said during a recent meeting that the amendment is proof of the city’s stake. The city has become far more efficient in budgeting, he said. The operating budget from the last reappraisal cycle — $317 million — had more purchasing power than the current $345 million proposal, he said. And the city is committed to funding both contingency and renewal line items, he said.
“We continue to pick up savings, incrementally, department by department,” he said.
The $10 million request for city spending on the raises will be difficult, he told the council.
“My whole thesis here has been: Let’s get the budget in place so that we fund government, do the thing that we’ve got to do and then take up this separate challenge,” Roig said. “I’ve made a public commitment that the city will have legitimate skin in the game. We have been anchored against a total dollar figure of $20 million, and you have asked me and others have asked, ‘Well, the city should fund half of that.’ I said, ‘Well, I would love to make that commitment to you, but I’m not going to make a commitment unless I see the path to that $10 million.”
(READ MORE: Chattanooga Mayor Tim Kelly’s administration defends split budget proposal)
He doesn’t see it now, he said, but the city is committed to looking into forging one. Getting there would require more time and more talk, he said.
“And going back to the reality that we have presented a good budget that does not have a ton of fat on it,” Roig continued, “in the intervening weeks since we last interacted, Councilman Henderson, I have not been able to find what I would call a collectively palatable path toward $10 million, because as we get closer and closer to muscle and bone, we have to start talking about, ‘Well, hold on,’ because we’re getting into operations, we’re getting into personnel.
“We’re getting into what the administration believes to be essential functions of government.”
The council is now set to take another, final vote on the budget during its next meeting, June 10.
Contact Mariah Franklin at mfranklin@timesfreepress.com or 423-757-6354.