Chattanooga, TN, August 18, 2025
News Summary
Chattanooga Mayor Tim Kelly has announced a significant reduction in the city’s property tax rate, proposing a new rate of $1.93 per $100 of assessed property value. This marks the largest tax cut in decades, resulting in expected city revenues of approximately $44.8 million, down from $50 million. Funds will support essential services such as road maintenance, public safety, and affordable housing initiatives. A public hearing is scheduled for August 19, allowing citizens to voice their opinions on the changes.
Chattanooga Proposes Significant Property Tax Cut to $1.93
Chattanooga Mayor Tim Kelly has proposed a significant reduction in the city’s property tax rate, aiming to lower it from $2.25 to $1.93 per $100 of assessed property value. This proposed cut marks the largest property tax reduction in decades for the city and stems from recent budget discussions between Mayor Kelly and the Chattanooga City Council.
If implemented, the new rate would decrease city revenue expectations to approximately $44.8 million, compared to around $50 million anticipated under the previously proposed rate of $1.99. Despite the reduction in tax rate, rising property values are expected to maintain nearly $45 million in revenue to support city initiatives.
Funding Allocations and Budget Adjustments
The revenue generated from the new tax rate is intended to support vital city services, including road maintenance, public safety, and affordable housing initiatives. A significant portion of the funding—$7.5 million—will be dedicated to road paving, while an additional $5 million is earmarked for eviction prevention and affordable housing solutions. The proposed budget also includes plans to hire 15 new firefighters and acquire a new fire truck for Station 21 located in East Brainerd.
To accommodate the proposed tax cut, Mayor Kelly’s office recommended cuts to some expenditures, including technology licenses and professional testing fees. Additionally, a previous plan of contributing $5 million to the police and fire pension fund has been revised, which has raised concerns among city council members regarding the implications for first responders.
Public Engagement and Community Concerns
A public hearing concerning this tax proposal is scheduled for Tuesday, August 19, allowing residents to voice their opinions and concerns about the proposed changes. While the average cost per household is projected to increase by just $1.10 per day if the new rate is adopted, there remains apprehension about the impact of pension fund cuts on local law enforcement and firefighting personnel. Council Chair Jenny Hill has expressed the importance of fair treatment for first responders during budget negotiations.
Concerns have been raised that local police and firefighters may lag in pay when compared to competing agencies, which raises issues around workforce retention and overall public safety. In response to these challenges, alternative budget proposals have been discussed in public meetings to explore different tax and funding strategies aimed at relieving financial strains on the community.
Despite the proposed tax cuts, Chattanooga’s tax rate at $1.93 would still remain lower than those in nearby cities such as Knoxville, Nashville, and Memphis, which aligns with Tennessee’s recognized status for lower tax rates.
Conclusion
As the public hearing approaches, both city officials and residents prepare for discussions that could shape the economic landscape of Chattanooga for years to come. The final decision on the tax rate and budget allocations will be critical in determining the resources available for essential community services moving forward.
FAQ
What is the proposed new property tax rate for Chattanooga?
The proposed new property tax rate is $1.93 per $100 of assessed property value.
What will this property tax cut mean for city revenue?
This tax cut is expected to generate approximately $44.8 million in revenue, down from about $50 million under the previous proposed rate.
What are the key areas where the generated funds will be allocated?
The funds are primarily allocated towards road maintenance, public safety, and affordable housing initiatives.
When is the public hearing scheduled?
The public hearing regarding this property tax proposal is scheduled for Tuesday, August 19.
Will the average household see a significant increase in costs?
Yes, the average cost per household is anticipated to rise by approximately $1.10 per day if the new rate is adopted.
Key Features Chart
| Feature | Details |
|---|---|
| Current Tax Rate | $2.25 |
| Proposed Tax Rate | $1.93 |
| Revenue from New Rate | $44.8 million |
| Allocations for Roads | $7.5 million |
| Allocations for Eviction Prevention | $5 million |
| New Firefighters to be Hired | 15 |
| Public Hearing Date | August 19 |
| Average Daily Cost Increase | $1.10 |
Deeper Dive: News & Info About This Topic
HERE Resources
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Chattanooga Proposes Historic Property Tax Reduction
Erlanger Park Stadium Construction on Track for Completion
Soddy-Daisy Zoning Board Denies Asphalt Plant Proposal
La Vergne Named ‘Freest City’ in Tennessee
Chattanooga Expands Senior Tax Freeze Program
Additional Resources
- NewsChannel 9: Chattanooga Mayor Tim Kelly Announces Property Tax Cut
- Wikipedia: Property Tax
- Times Free Press: Chattanooga Mayor Unveils Reduction in Proposed Property Tax
- Google Search: Chattanooga property tax news
- Local 3 News: Mayor Kelly Releases Final Version of Property Tax Proposal
- Google Scholar: Chattanooga property tax
- Chattanooga Pulse: City Budget Proposal Funds Police and Fire Raises
- Encyclopedia Britannica: Local Government
- Local 3 News: City Councilman Leaves Meeting After Heated Exchange
- Google News: Chattanooga budget 2025
Author: STAFF HERE CHATTANOOGA WRITER
The CHATTANOOGA STAFF WRITER represents the experienced team at HEREChattanooga.com, your go-to source for actionable local news and information in Chattanooga, Hamilton County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Riverbend Festival, Chattanooga Oktoberfest, and Moon River Festival. Our coverage extends to key organizations like the Chattanooga Area Chamber of Commerce and United Way of Greater Chattanooga, plus leading businesses in manufacturing, insurance, and utilities that power the local economy such as Volkswagen Chattanooga, BlueCross BlueShield of Tennessee, and EPB. As part of the broader HERE network, including HEREBristol.com, HEREKnoxville.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
