Taxes are always going up. Even when we're told otherwise by folks pretending they are not and calling the increases "revenue growth." It's a bit of a political shell game.
To be clear, taxes — whether we call them taxes or "revenue growth" — make our world go round.
Our taxes pay police officers, social workers, recycling truck drivers and teachers. Taxes build schools and pave roads and expand broadband. Those things won't happen without the necessary pain of collecting and paying taxes.
That's why having a clear understanding of what we call them and what they do for us is important.
You may recall that when our properties were reappraised four years ago, Hamilton County Mayor Jim Coppinger, after varied attempts to "raise taxes" failed, talked individually with county commissioners and then proposed leaving the county property tax rate where it was, rather than dropping it — essentially creating a de facto tax increase without calling it one to pay for school construction, jail expansion at Silverdale Detention Center and a regional sewage treatment plant. The proposal sailed through the county commission with only one opposing vote.
It seems we're about to see this play out again this year in Chattanooga. Mayor Tim Kelly, in introducing his first budget since taking office in April, will rely on continuing revenue "growth" in property tax revenues — to the tune of about $30 million — to fund employee raises and address the city's labor shortage.
"Government shouldn't be the caboose on the train of the labor market," Kelly told the Times Free Press on Tuesday. "We need good people, and you have to compete with the private market to get them."
That's all true. So is the tax increase name game.
Tennessee state law says a county's property reappraisal, made every four years, cannot create by itself tax revenue increases, so our leaders are forced to lower the county (or city) property tax rate to keep us from overpaying. The law, however, does allow county and municipal governments to set or change our tax rate. So they lower it, and then — often — raise it back up.
In 2017, Coppinger announced he would present two resolutions to the county commission about the millage rate. The first would, as the law required, reduce the county's tax rate to the new level certified by the state. The second would reset it, as allowed by law, to a level that would keep increased revenue coming.
Abracadabra! The county collected millions more in tax revenue. They called it an "investment," not a tax hike. And we agreed.
But as we've noted before, it's a matter of semantics — a Greek-derived word for the manipulation of meaning. Think of it as a fold in the fabric of governing. A pleat to give leaders cover from the outcry of disappointed residents. A tuck to hide the unpleasant sight of government sausage making.
The city's current tax rate is $2.27 per $100 of a home's assessed value. Because homes in Chattanooga have seen a boost in market value, the city's adjusted tax rate would (to meet state law) be $1.85 per $100 of assessed value. By proposing a 40-cent higher property tax rate of $2.25, Kelly estimates a $30 million increase in revenue, even with a rate set 2 cents lower than today's rate.
For a home with a value that has increased to $175,000, the new rate would mean about $199 in additional city taxes this year. The owner's city property taxes would rise to $984 and the combined city and county property taxes to $2,194.
Kelly proposes putting $10 million toward the fire department, raising the base pay of a fire cadet by 24% from $32,524 to $40,330. He wants to put another $10 million toward police, raising the base pay of a cadet by 24% from $35,141 to $43,575. He also proposes cutting 25 historically unfilled officer positions, saying the money would best be used to attract, retain and train better officers. And he is budgeting $1.2 million for 11 alternative response positions — 10 certified social workers and a social work supervisor to respond to certain police calls.
It's not defunding police. Nor should it be. It's investing in police at a higher and different level. In Kelly's words — and he's right — it's "smarter policing, community policing and policing that isn't exploitative." At the same time, it addresses the concerns protesters had last summer in the aftermath of the Minneapolis police killing of George Floyd.
Kelly also wants to increase the pay for other city employees with another $10 million, including a new minimum wage of $15 per hour for city employees.
There are cuts. Losing a total of 53 vacant or restructured positions frees up about $1.2 million. Another $500,000 was cut from former Youth and Family Development programs and reallocated to the Department of Early Learning. Yet another $4 million was saved by eliminating inefficiencies — like unused software contracts.
Much of the savings will be put toward the paving budget, which will go from about $6 million to $10 million.
These all seem like smart moves.
Regardless of what any government calls our tax dollars, they still are our tax dollars, and those who work in government work for us. Here's the thing: None of it is free. Those police officers, social workers, educators, paving contractors and truck drivers have to get paid. If they don't, services aren't there when we need them.
That's our job — to keep government rolling — like it or not.